Freightways Annual Profit Falls 33% on New Zealand Cargo Slump, Tax Charge

Freightways Ltd., New Zealand’s second-biggest courier company, said full-year profit fell by a third as weak economic growth curbed demand and the company incurred one-time tax costs.

Net income fell to NZ$23.2 million ($16.3 million) in the year ended June 30 from NZ$34.6 million a year earlier, the Auckland-based company said in a statement. Full-year sales fell 3 percent to NZ$328.5 million.

New Zealand’s economy is recovering slowly from its worst recession in three decades and central bank Governor Alan Bollard last month said the outlook had “softened” amid weak domestic demand. Freightways said existing customers of its New Zealand Couriers, Post Haste and Castle Parcels units sent fewer packages than the year earlier.

“We anticipate the recovery of the economy and how it translates into the performance of Freightways’ core express package business, will continue to be gradual,” the company said. The express package units make up about 80 percent of total revenue, it said.

Freightways shares fell 1 cent to NZ$2.67 at 11:45 a.m. in Wellington, extending the six-month decline to 14 percent.

The company increased its deferred tax liability by NZ$5.7 million because of changes to building depreciation rules in the May budget.

Excluding the tax adjustment, net income fell 16 percent to NZ$28.9 million, which matched the average estimate of six analysts surveyed by Bloomberg.

To contact the reporter on this story: Tracy Withers in Wellington at twithers@bloomberg.net.

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