Mainfreight Limited — Interim / Quarterly Report 2021

Nov 10, 2021

MAINFREIGHT LIMITED Preliminary Half Year Announcement For the Six Months ended 30 September 2021

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Preliminary half year report on consolidated results (including the results for the previous corresponding half year). This report has been prepared in a manner which complies with generally accepted accounting practice and fairly presents the matters to which the report relates and is based on unaudited financial statements.

The Listed Issuer has a formally constituted Audit Committee of the Board of Directors.

Income Statement For the Six Months ended 30 September 2021

Notes	Six Months Ended Six Months Ended Year ended 30 September 2021 30 September 2020 31 March 2021 unaudited unaudited audited
Operating Revenue Interest Revenue Total Revenue Transport Costs Labour Expenses Other Expenses Earnings before Interest Costs, Tax, Depreciation, Amortisation and Abnormal Items Depreciation of Right to Use Assets Finance Costs Relating to Lease Liabilities Other Depreciation & Amortisation Expenses Other Finance Costs Profit before Taxation Income Tax Expense Net Profit for the Period Earnings per share Basic and diluted earnings (cents per share)	$000 $000 $000
	2,274,386 1,608,861 3,543,531 ‐ ‐ 307
	2,274,386 1,608,861 3,543,838
	(1,450,091) (953,205) (2,141,744) (422,422) (350,132) (723,444) (115,962) (100,772) (211,836)
	285,911 204,752 466,814
	(59,160) (60,749) (113,938) (7,572) (8,394) (16,225) (34,862) (30,602) (68,460) (2,331) (2,742) (5,784)
	181,986 102,265 262,407 (51,176) (29,348) (74,297)
	130,810 72,917 188,110
	129.90 72.41 186.81
For the Six Months ended 30 September 2021 Statement of Comprehensive Income
Net Profit for the Period Other Comprehensive Income for the Period, Net of Tax Other comprehensive income to be reclassified to profit/(loss) in subsequent periods Exchange Differences on Translation of Foreign Operations Income Tax Effect Net Other Comprehensive income to be reclassified to profit/(loss) in subsequent periods Other comprehensive income not to be reclassified to profit/(loss) in subsequent periods Revaluation of Land including Foreign Exchange Movements Income Tax effect Defined Benefit Pension Provision Income Tax effect Net Other Comprehensive income not to be reclassified to profit/(loss) in subsequent periods Other Comprehensive Income for the Period, Net of Tax Total Comprehensive Income for the Period, Net of Tax	130,810 72,917 188,110 (4,314) (8,555) (22,545) 162 (1,078) (2,782)
	(4,152) (9,633) (25,327)
	(625) 109 55,814 ‐ ‐ (5,324) (5) 15 (159) 1 ‐ 40
	(629) 124 50,371
	(4,781) (9,509) 25,044
	126,029 63,408 213,154

The accompanying notes form part of these interim financial statements

MAINFREIGHT LIMITED Balance Sheet As at 30 September 2021
Notes	30 September 2021 30 September 2020 31 March 2021 unaudited unaudited audited
Current Assets Bank Trade Debtors Income Tax Receivable Other Debtors Non‐current Assets Property Plant & Equipment Right of Use Assets Software Goodwill Other Intangible Assets Deferred Tax Asset Total Assets Current Liabilities Bank Trade Creditors & Accruals Employee Entitlements Provision for Taxation Lease Liability for Right of Use Assets Asset Finance Loans Non‐current Liabilities Bank Term Loan Employee Entitlements Deferred Tax Liability Lease Liability for Right of Use Assets Asset Finance Loans Total Liabilities Shareholders' Equity Share Capital Retained Earnings Revaluation Reserve Foreign Currency Translation Reserve Defined Benefit Pension Reserve Total Equity Total Liabilities & Equity	$000 $000 $000
	121,122 128,206 139,555 600,974 388,783 489,246 ‐ 1,594 251 47,164 62,665 89,531
	769,260 581,248 718,583 792,887 682,286 755,566 169,005 126,067 162,597 573,952 577,060 567,956 58,398 52,507 53,510 209,446 217,580 208,626 1,440 3,012 1,607 18,751 15,389 18,461
	1,823,879 1,673,901 1,768,323
	2,593,139 2,255,149 2,486,906
	‐ ‐ ‐ 446,314 341,318 412,826 93,361 66,902 91,997 15,815 4,782 30,344 126,068 123,221 118,158 8,976 2,056 9,198
	690,534 538,279 662,523 205,937 239,475 210,000 3,567 3,288 2,922 7,204 6,589 6,571 468,212 469,856 467,276 21,924 2,152 22,568
	706,844 721,360 709,337
	1,397,378 1,259,639 1,371,860
	85,821 85,821 85,821 982,879 812,400 897,383 140,469 90,713 141,094 (12,812) 7,034 (8,660) (596) (458) (592)
	1,195,761 995,510 1,115,046
	2,593,139 2,255,149 2,486,906

The accompanying notes form part of these interim financial statements

MAINFREIGHT LIMITED Statement of Changes in Equity For the Six Months Ended 30 September 2021	MAINFREIGHT LIMITED Statement of Changes in Equity For the Six Months Ended 30 September 2021
	Foreign Defined Asset Currency Benefit Ordinary Revaluation Translation Pension Retained Total Shares Reserve Reserve Reserve Earnings Equity
Six Months to 30 September 2021 (unaudited) Balance at 1 April 2021 Profit for the Period Other Comprehensive Income Total Comprehensive Income for the Period Transactions with Owners in their Capacity as Owners Supplementary Dvidends Dividends Paid Foreign Investor Tax Credit Balance at 30 September 2021 Six Months to 30 September 2020 (unaudited) Balance at 1 April 2020 Profit for the Period Other Comprehensive Income Total Comprehensive Income for the Period Transactions with Owners in their Capacity as Owners Supplementary Dvidends Dividends Paid Foreign Investor Tax Credit Balance at 30 September 2020 Twelve Months to 31 March 2021 (audited) Balance at 1 April 2020 Profit for the Period Other Comprehensive Income Total Comprehensive Income for the Period Transactions with Owners in their Capacity as Owners Supplementary Dvidends Dividends Paid Foreign Investor Tax Credit Balance at 31 March 2021	$000 $000 $000 $000 $000 $000
	85,821 141,094 (8,660) (592) 897,383 1,115,046 ‐ ‐ ‐ ‐ 130,810 130,810 ‐ (625) (4,152) (4) ‐ (4,781)
	‐ (625) (4,152) (4) 130,810 126,029 ‐ ‐ ‐ ‐ (1,513) (1,513) ‐ ‐ ‐ ‐ (45,314) (45,314) ‐ ‐ ‐ ‐ 1,513 1,513
	85,821 140,469 (12,812) (596) 982,879 1,195,761
	85,821 90,604 16,667 (473) 773,720 966,339 ‐ ‐ ‐ ‐ 72,917 72,917 ‐ 109 (9,633) 15 ‐ (9,509)
	‐ 109 (9,633) 15 72,917 63,408 ‐ ‐ ‐ ‐ (1,140) (1,140) ‐ ‐ ‐ ‐ (34,237) (34,237) ‐ ‐ ‐ ‐ 1,140 1,140
	85,821 90,713 7,034 (458) 812,400 995,510
	85,821 90,604 16,667 (473) 773,720 966,339 ‐ ‐ ‐ ‐ 188,110 188,110 ‐ 50,490 (25,327) (119) ‐ 25,044
	‐ 50,490 (25,327) (119) 188,110 213,154 ‐ ‐ ‐ ‐ (2,132) (2,132) ‐ ‐ ‐ ‐ (64,447) (64,447) ‐ ‐ ‐ ‐ 2,132 2,132
	85,821 141,094 (8,660) (592) 897,383 1,115,046

The accompanying notes form part of these interim financial statements

MAINFREIGHT LIMITED Cash Flow Statement For the Six Months ended 30 September 2021

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	Six Months Ended Six Months Ended Year ended 30 September 2021 30 September 2020 31 March 2021 unaudited unaudited audited
Cash Flows from Operating Activities Receipts from Customers Interest Received Payments to Suppliers and Team Members Finance Charge on NZ IFRS 16 Leases Interest Paid Income Taxes Paid Net Cash Flows from Operating Activities Cash Flows from Investing Activities Proceeds from Sale of Property, Plant & Equipment Proceeds from Sale of Software Repayments by Team Members Purchase of Property, Plant & Equipment Purchase of Software Advances to Team Members Net Cash Flows from Investing Activities Cash Flows from Financing Activities Proceeds of Long Term Loans Dividend Paid to Shareholders Repayment of Loans Lease Payments NZ IFRS 16 Net Cash Flows from Financing Activities Net Increase / (Decrease) in Cash and Cash Equivalents Net Foreign Exchange Differences Cash and Cash Equivalents at Beginning of Period Cash and Cash Equivalents at End of Period Comprised: Bank and Short Term Deposits Bank Overdraft	$000 $000 $000
	2,609,928 1,890,812 3,459,132 ‐ ‐ 307 (2,356,438) (1,648,586) (2,992,486) (7,572) (8,394) (16,225) (2,331) (2,743) (5,784) (65,174) (42,580) (68,662)
	178,413 188,509 376,282
	1,411 2,386 3,529 ‐ ‐ ‐ 3 2 ‐ (79,600) (49,719) (104,048) (13,798) (7,502) (18,030) ‐ ‐ (2)
	(91,984) (54,833) (118,551) 20,000 30,000 62,054 (45,314) (34,237) (64,447) (23,310) (58,462) (118,073) (56,232) (55,978) (107,125)
	(104,856) (118,677) (227,591) (18,427) 14,999 30,140 (6) (2,927) (6,719) 139,555 116,134 116,134
	121,122 128,206 139,555
	121,122 128,206 139,555 ‐ ‐ ‐
	121,122 128,206 139,555

The accompanying notes form part of these interim financial statements

MAINFREIGHT LIMITED Notes to the Financial Statements For the Six Months ended 30 September 2021

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1 Corporate Information

The preliminary half year report announcement of Mainfreight Limited ("the parent") and its subsidiaries ("the Group") for the six months ended 30 September 2021 was authorised for issue in accordance with a resolution of the Directors.

Mainfreight Limited is a company limited by shares incorporated in New Zealand whose shares are publicly traded on the NZX Main Board (New Zealand Stock Exchange).

2 Accounting Policies

Accounting policies remain consistent with the prior year ended 31 March 2021 financial statements.

3 Required NZX Disclosures

Required NZX Disclosures Movements in Ordinary Shares on Issue Closing balance Average balance during the period Net Tangible Assets Net Tangible Assets Net Tangible Assets per Security (cents per share) Dividends Paid and Proposed Recognised Amounts Declared and Paid during the Period to Parent Shareholders Final Fully Imputed Dividend for 2021: 45 cents (2020: 34 cents) Unrecognised Amounts Interim Fully Imputed Dividend for 2022: 55.0 cents (2021: 30.0 cents)	Parent Six Months Ended Six Months Ended Year ended 30 September 2021 30 September 2020 31 March 2021 unaudited unaudited audited
	Shares Shares Shares
	100,698,548 100,698,548 100,698,548 100,698,548 100,698,548 100,698,548
	$000 $000 $000
	907,726 707,022 832,842 901.43 702.12 827.06 45,314 34,237 55,384 30,210

After the balance date, the above unrecognised dividends were approved by Directors' resolution dated 10 November 2021 These amounts have not been recognised as a liability as at 30 September 2021 but will be brought to account in the full year to 31 March 2022.

MAINFREIGHT LIMITED Notes to the Financial Statements For the Six Months Ended 30 September 2021

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4 Segmental Reporting

An operating segment is a component of an entity that engages in business activities from which it may earn revenues and incur expenses whose operating results are regularly reviewed by the entity’s chief operating decision maker and for which discrete financial information is available. The Group operates in the domestic supply chain (i.e. moving and storing freight within countries) and air and ocean freight industries (i.e. moving freight between countries).

New Zealand, Australia, The Americas and Europe are each reported to management as one segment as the businesses there perform both domestic and air and ocean services.

The segmental results from operations are disclosed below.

Geographical Segments

The following table represents revenue, margin and certain asset information regarding geographical segments for the six months ended 30 September 2021 and 30 September 2020.

Six Months to 30 September 2021 (unaudited) Operating Revenue ‐ Sales to Customers outside the Group ‐ Intersegment Sales Total Revenue PBT & Abnormal Items Net Interest Expense Depreciation & Amortisation Capital Expenditure Trade Receivables Non‐current Assets Total Assets Total Liabilities Six Months to 30 September 2020 (unaudited) Operating Revenue ‐ Sales to Customers outside the Group ‐ Intersegment Sales Total Revenue PBT & Abnormal Items Net Interest Expense Depreciation & Amortisation Capital Expenditure Trade Receivables Non‐current Assets Total Assets Total Liabilities	The Inter‐ New Zealand Australia Americas Asia Europe Segment Total
	$000 $000 $000 $000 $000 $000 $000
	498,446 557,604 623,796 155,954 438,586 ‐ 2,274,386 3,819 15,684 30,350 175,574 29,632 (255,059) ‐
	502,265 573,288 654,146 331,528 468,218 (255,059) 2,274,386
	48,070 47,279 49,218 16,253 21,166 ‐ 181,986 2,553 3,736 2,178 68 1,368 ‐ 9,903 26,231 23,661 14,780 1,459 27,891 ‐ 94,022
	43,907 19,826 11,554 764 15,936 ‐ 91,987 118,497 140,979 198,856 130,973 123,728 (112,059) 600,974 710,955 474,775 236,200 18,106 383,843 ‐ 1,823,879 807,806 635,269 473,339 199,436 589,348 (112,059) 2,593,139 338,545 361,164 310,092 136,982 362,654 (112,059) 1,397,378
	378,895 432,211 387,041 67,013 343,701 ‐ 1,608,861 750 11,677 22,964 58,821 21,421 (115,633) ‐
	379,645 443,888 410,005 125,834 365,122 (115,633) 1,608,861
	37,500 32,757 13,264 6,205 12,539 ‐ 102,265 2,099 4,627 2,559 72 1,779 ‐ 11,136 23,770 22,899 13,639 1,604 29,439 ‐ 91,351
	29,546 13,324 4,646 911 6,408 ‐ 54,835 82,757 93,778 105,216 34,629 96,226 (23,823) 388,783 578,318 467,232 213,923 18,652 395,776 ‐ 1,673,901 661,776 603,154 364,719 78,914 570,409 (23,823) 2,255,149 281,511 358,822 238,456 46,035 358,638 (23,823) 1,259,639

MAINFREIGHT LIMITED Notes to the Financial Statements For the Six Months Ended 30 September 2021

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4 Segmental Reporting ‐ continued

Division Segments

The following table represents revenue and PBT in respect of the three main types of services for the six months ended 30 September 2021 and 30 September 2020.

Six Months to 30 September 2021 (unaudited) Revenue PBT & Abnormal Items Six Months to 30 September 2020 (unaudited) Revenue PBT & Abnormal Items	Domestic Transport Warehousing Air & Ocean $000 $000 $000 894,315 264,615 1,115,456 72,913 22,188 86,885 746,578 214,503 647,780 57,446 16,124 28,695	Total
		$000
		2,274,386 181,986 1,608,861 102,265

Reconciliation between non‐GAAP and the Income Statement Profit before Taxation for the Period Abnormal Items Profit before Abnormal Items and Taxation for the Period Interest Income Finance Costs Relating to Lease Liabilities Other Finance Costs EBITA Depreciation of Right of Use Assets Other Depreciation and Amortisation Expenses EBITDA (Adjusted)	30 Sep 2021 30 Sep 2020 unaudited unaudited
	$000 $000
	181,986 102,265 ‐ ‐
	181,986 102,265 ‐ ‐ 7,572 8,394 2,331 2,742
	191,889 113,401
	59,160 60,749 34,862 30,602
	285,911 204,752

EBITDA (Adjusted) is defined as earnings before net interest expense, tax, depreciation, amortisation, abnormal items and royalties (segment only; not Group).

There are no customers in any segment that comprise more than 10% of that segment's revenue.

Bank term loan is allocated based on segment net assets excluding bank term loan.

The geographical segments are determined based on the location of the Group's assets.