Mark Troughear: Freightways CEO on the company reporting a decrease in net profits

Logistics and courier company Freightways has recorded a 5.8 percent decrease in net profit after weathering what its leaders believe to be the worst of the economic cycle in New Zealand and Australia.

Freightways announced its 2024 results to the NZX on Monday. It reported net profit after tax of $70.9 million, a reduction from its 2023 result that the company said was largely due to higher interest expenses.

Earnings before interest, depreciation, tax, and amortisation were $229.1m, up 6.6% from 2023.

Freightways CEO Mark Troughear explains further.

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Episode Transcript

Speaker 1 (00:00):
Heather duplesl one of the biggest delivery companies, Reckons, one
of our biggest by the way delivery companies. Reckons, We're
coming out the other side of our recession. This is
Freightways runs New Zealand, Couriers runs Big Chill. Of course,
it's recorded a five point eight percent decrease in its
net profit. That's down to about seventy one million dollars.
But the company is celebrating the result because it's whether
the worst of our economic times. It Reckons, Mark Trow

(00:21):
Here is the Freightway CEO.

Speaker 2 (00:22):
Hey, Mark, Hi, Heather, how are you.

Speaker 1 (00:25):
I'm very well, thank you. So are you seeing this
as actually quite a small drop for how bad things
have been?

Speaker 2 (00:32):
Yes? Yeah, in a word, yes, I think. I don't
know that it gets any worse than this, and it's
been at this level for a wee while now. So
now there's a little bit of light at the end
of the tunnel that hopefully asn't a train coming the
other way. With some rate cuts here in New Zealand,
maybe gradually we can start to see someone proven as
we get into next year.

Speaker 1 (00:52):
What do you mean it doesn't get as bad as this?

Speaker 2 (00:55):
Well, I think We've tracked our customer activity month or months,
day on day for a long time now, and I
think we're at at the moment seems to be as
bad as it has been through that last eighteen months.
We're not seeing it getting any worse. We're not seeing
get better, but it's really stable in terms of the
volume coming from our customers. So what we would hope

(01:17):
is with a little bit of confidence from lower interest
rates as we come into next year, that that volume
then might pick up.

Speaker 1 (01:23):
Do you reckon it's going to make a big difference
what happened with the ocr last week.

Speaker 2 (01:27):
I think it'll take maybe ex or so months to
wash through. So our pick would be maybe after Christmas,
you're starting to see a few green shoots out there, So.

Speaker 1 (01:35):
You think because I was kind of penning hopes on
the fact that just that signal that we are through
the worst of it would give some people some confidence
to start spending. They don't need to hold for the
big rollover on the interest rates and stuff. You don't
think that'll happen.

Speaker 2 (01:49):
I suspect it will take a little while maybe for
people to roll over their interest rates, have a few
more dollars in their pocket. The tax cuts that we've
just had as well, and again it's a small contribution
to people to put a little bit more money in
their pocket. But my sense, my gut feel, is it
might just take six months to wash through to see
a little bit more volume ail.

Speaker 1 (02:08):
So still post the summer holidays before we really start
to see a pickup in business.

Speaker 2 (02:13):
Look, I think so, I mean, Christmas time is a
busier time for us, but I don't think it's going
to be that much busier than last year. I think
we'll ride through that period and then in the new year.
I mean some cases it's businesses it might need to
invest to grow their capacity, to push out a bit
more frase and have a bit more activity. For things
like the construction industry here, so we do a lot

(02:34):
of a lot of work for people in the construction
sector and that sector is really down on the doldrums
at the moment. It might take a little while for
that sort of sector to flow through with better results.

Speaker 1 (02:43):
Yeah, I suspect it's going to be like we're not
talking months, We're probably talking years, aren't we with them?

Speaker 2 (02:50):
But eventually, essentially we did a huge amount of work
for people back in If you remember the COVID days
where you couldn't fly anywhere, but you can do up
your house and you come off a high of that
back and probably twenty twenty two and it's been really muted.
But even sectors like that, I suspect maybe over the
next six months just start to get a little bit
of a lift.

Speaker 1 (03:10):
Here's the thing, Mark, I mean, if you listen to
the likes of I think it was Fitch who said
it a few weeks back, we I guess many of
us are banking on bouncing out of this and just
going back to sort of the hype of the last
ten years once we get through the COVID stuff. But
they were saying, temper you expectations because the Chinese economy
is not doing that well and the recovery is just
going to be pretty grinding from here. Is that what

(03:30):
you're expecting?

Speaker 2 (03:32):
Look, I think it'd be slow and steady, but that's
all right for us. Slow and steady, and even one
percent two percent growth out of our existing customers that
feeds our network pretty well, so we would be okay
with that. We'll win a bit of new business, we'll
attract a few new customers, get our pricing right, You
know that won't be the worst outcome.

Speaker 1 (03:52):
Oh good stuff, Mark, listen, thank you, appreciated, look after yourself.
That's Mark trow here Froatway CEO.

Speaker 2 (03:58):
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Speaker 1 (04:01):
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