Mainfreight Limited - Interim / Quarterly Report 2022

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M A I N F R E I G H T L I M I T E D

NZX MARKET RELEASE

2 February 2022

MAINFREIGHT LIMITED – TRADING UPDATE

Mainfreight Limited (NZX: MFT) is pleased to provide this trading update in the interests of keeping the market informed, providing insight into supply chain congestion (both domestically and internationally), and the effects of the Covid-19 Omicron outbreaks across the regions within which Mainfreight operates.

Financial Trading Update

Today’s information covers 43 weeks of trading and is based on 1 April 2021 to 31 December 2021 monthly financial statements, plus weekly financials for January 2022:

Segmental by Region New Zealand NZ$ Australia AU$ Americas US$ Europe EU€ Asia US$ Total Mainfreight Group NZ$ Segmental by Product Transport NZ$ Warehousing NZ$ Air & Ocean NZ$ Total Mainfreight Group NZ$	This Year Last Year Revenue Revenue *Var* $000 $000 % 902,081 673,838 34% 939,573 707,347 33% 841,078 451,306 86% 451,514 334,211 35% 203,314 92,117 121% 4,134,917 2,848,150 *45%* This Year Last Year Revenue Revenue Var $000 $000 % 1,536,806 1,294,404 19% 465,896 368,661 26% 2,132,215 1,185,085 80% 4,134,917 2,848,150 45%**	This Year Last Year PBT PBT *Var* $000 $000 %
		103,217 74,556 38% 86,640 59,082 47% 74,230 18,911 293% 22,432 13,245 69% 24,035 7,100 239% 372,019 200,763 *85%* This Year Last Year PBT PBT *Var* $000 $000 %
		141,652 108,065 31% 43,700 32,059 36% 186,667 60,639 208% 372,019 200,763 *85%*

* Excludes Inter-company revenue

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MAINFREIGHT – GLOBAL LOGISTICS

Mainfreight Limited – Trading Update 2 February 2022

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Commentary

These financial results are not a surprise, rather a continuation of the increasing freight volumes and trends seen in our first-half results. They are also a reflection of the improving financial performance across our Asia, Europe and Americas businesses.

International shipping and airfreight continue to be impacted by congestion, and with demand far exceeding supply, freight rates remain elevated.

Covid-19/Omicron restrictions have impacted service levels through absenteeism in our Australia, Europe and Americas operations. At the time of release, we have yet to see any impact in our New Zealand and Asia businesses, albeit China’s border restrictions are tightening.

We expect elevated freight volumes to continue as the calendar year progresses, with managing service levels on behalf of our customers a key priority.

Regional Overview

New Zealand

Partial Alert Levels | Auckland border restrictions during the period

A vaccination mandate for all of our New Zealand team members became effective on 17 January 2022. Preparations continue for absenteeism as a consequence of the Omicron variant outbreak.

Domestic Transport volumes remain at elevated levels compared to prior periods, with 2021 Christmas volumes the largest on record.

Our Warehousing business sees demand at its highest levels as customers look to increase their stock holdings. Additional facilities are providing capacity and we have new Warehousing building projects underway in Hamilton and Auckland.

Mainfreight Limited – Trading Update 2 February 2022

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Air & Ocean freight demands remain strong both inbound and outbound. Space restrictions continue with most major shipping lines selectively allocating space.

Australia

A variety of restrictions during the period largely influenced by Omicron

Trading across all three products maintained the momentum of the half-year. However congestion issues due to Omicron infection and isolation rates saw services restricted in our Sydney operations late-December and into January. As a consequence, the financial performance in our Transport branches was affected during this time. Service levels have since improved. Volumes are expected to remain strong through to year-end.

Warehousing volumes are consistent; new facility construction is underway in Sydney, Perth, Adelaide and Melbourne, with additional sites being sought in Brisbane.

Our Air & Ocean division’s activity reflects volumes and space restrictions experienced elsewhere in the world.

Europe

High Omicron infection rates across Europe from December

While team numbers have been reduced as the virus infection levels restrict work access, our European operations are maintaining satisfactory service levels and financial performance is pleasing.

Our Transport performance is satisfactory with volumes improving into our seasonal peak post-January. Warehousing volumes are on the increase with inquiries for additional space continuing to be strong. New customer gains see a further 10,000 pallets awaiting implementation.

Mainfreight Limited – Trading Update 2 February 2022

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As with our global network, Air & Ocean volumes continue to be elevated, particularly imports from Asia. Trans-Atlantic growth is a key priority to offset capacity constraints out of Asia.

Asia

Varying Covid-19 restrictions across all countries

Air & Ocean volumes increased significantly reflecting the global demand out of Asia. Space constraints remain with shipping lines. Airfreight space and rate levels fluctuate, depending on seasonality and volume demand. Forward bookings postChinese New Year (31 January to 6 February) remain encouraging.

We expect to open our first Indonesia branch in Jakarta in mid-2022.

The Americas

Restrictions continuing as a consequence of Omicron

Elevated volume levels in our Air & Ocean business continue for both Mainfreight and CaroTrans, predominantly inbound into the USA. CaroTrans has experienced a surge of demand for LCL space which is assisting revenue and profit levels.

In our Transport division, volumes and financial performance are improving, with the expectation of more growth in this sector.

Our Warehousing business has seen strong demand for space, with utilisation and activity levels continuing to improve. New branches in Dallas, LeHigh Valley (Pennsylvania) and Toronto are performing satisfactorily, and additional larger sites are being sought for Los Angeles and Newark.

Mainfreight Limited – Trading Update 2 February 2022

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Global Air & Ocean Trade-Lanes

These remain congested with shipping lines continuing to allocate space on a when-available basis. Rate structures remain elevated with expectations this will continue for some time to come.

Port congestion and restricted container equipment supply, particularly across Asia and the USA, remains a concern and is contributing to the congestion issues.

We continue to lobby shipping lines for space availability on behalf of our customers – with some success, including finding alternative solutions where possible. However, some of the customer growth we are experiencing may be limited by these conditions in the short term.

To Close

A satisfactory year-to-date result. Navigating constraints due to Omicron-enforced absenteeism remains a priority for us. Meeting our current customer service requirements is a key objective through to year-end.

Our intensive network model, with multiple branches and warehouses, provides us with access to alternatives, should we encounter infection issues at specific sites. Contactless delivery with increased safety protocols, and split shifts in our warehouses, are also being applied in preparation for further Covid-19 disruption.

Our full year financial results to 31 March 2022 will be released to the market on Thursday 26 May 2022.

Ends

Don Braid

Group Managing Director

Mainfreight Limited 2 Railway Lane, Otahuhu, Auckland 1062 PO Box 14038, Panmure, Auckland 1741 Email: [email protected]

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Mainfreight Limited Interim / Quarterly Report 2022

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