Feb. 14 (Bloomberg) -- Mainfreight Ltd., New Zealand’s largest trucking company, fell by the most in more than a decade after a European business it bought last year for 110 million euros ($145 million) under-performed.
Freight volumes and returns were worse than expected in the third quarter, Auckland-based Mainfreight said in a statement today, when it reported a NZ$46.8 million ($36 million) nine- month profit. Sales at Netherlands-based Wim Bosman Group, which the company bought last March, were weaker than forecast in both the second and third quarters. The stock fell 95 cents, or 9.2 percent, to NZ$9.40 at the 5 p.m. close in Wellington, the biggest drop since April 2000.
“Europe was the big disappointment,” Geoff Zame, an Auckland-based analyst at Craigs Investment Partners, who has a “buy” recommendation on the company, said in an interview. “It was significantly below where people would expect it to have been.”
Mainfreight’s debt-funded purchase of Wim Bosman was the company’s first acquisition since 2008 and marked its entry into Europe. The deal was part of the company’s ambitions to become a global business, adding to its existing presence in New Zealand, Australia, Asia and the U.S.
Freight volumes only matched prior-year levels in the three months ended Dec. 31, the company said. Still, net income rose 35 percent in the nine months through December and earnings before interest, tax, depreciation and amortization surpassed NZ$100 million for the first time, Mainfreight said.
“We remain satisfied with our investment and are excited by the growth opportunities Wim Bosman Group presents, irrespective of the European economic crisis,” the company said in the statement.
Fourth-quarter trading had started positively and Mainfreight was confident of a “satisfactory” year-end result, it said.
--Editors: Tracy Withers, John McCluskey
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