Mainfreight Results for Six Months Ended September 2017

MAINFREIGHT LIMITED

Mainfreight Lane | off Saleyards Road | Otahuhu 1062 | New Zealand
Tel +64 9 259 5500 | Fax +64 9 270 7400
PO Box 14-038 | Panmure | Auckland 1741 | New Zealand


Supporters of
MAINFREIGHT – GLOBAL LOGISTICS

MAINFREIGHT LIMITED

Financial result for the six months ended 30 September 2017 (Unaudited)

Commentary
Mainfreight is pleased to report our six monthly financial results to 30 September 2017.
 Total revenue (sales) increased by $83.15 million, or 7.3% over the same period last
year, to $1.23 billion (excluding foreign exchange effects, the increase is 7.4%).
 EBITDA improved $2.42 million or 2.8% to $88.77 million (no net foreign exchange
effects).
 Net profit (before abnormals) is up 1.1% over the prior period at $42.77 million.
Abnormal costs of $0.56 million after tax relate to restructuring our operations in the
Americas.

Whilst our financial results are again ahead of the year prior, we had expected a better
performance in this first half of our financial year.

Trading in our New Zealand Domestic operations was impacted by the additional costs
associated with servicing inter-Island freight movements via road and coastal shipping
following the Kaikoura earthquakes of last November.

Results from the Americas and Asia continue to disappoint, offset by a very satisfactory
performance in Australia and ongoing improvement in Europe.

Trading through October and into November has seen improvement over the prior year,
with increasing volumes of freight throughout all regions.

Divisional Performance (figures in local currencies)

New Zealand (NZ$)
Our New Zealand Domestic operations have had to contend with increased transport
and overhead costs to address the difficulties of moving freight to and from the South
Island via increased usage of road and coastal shipping alternatives. Offsetting this,
stronger intra-Island volumes, together with an expanded and improving Logistics
warehousing operation have assisted. In addition, the performance and resilience of
our people has ensured continuity of supply chain services for our customers in what
has been a challenging environment

Total revenue for the New Zealand division was up 10.2% at $316.87 million, while
EBITDA improved 3.5% compared to the same period last year, to $38.45 million.

Domestic Transport freight volumes are increasing as pre-Christmas retail builds
towards its peak season. Our Logistics operation continues to develop and is
experiencing substantial activity which is expected to continue through to year end. Our
Air & Ocean business maintains steady progress, with import revenues continuing to
see more growth over exports. A concentration of focus on our own global network
development remains a key differentiator for this business unit.


Australia (AU$)
Strong sales improvement across our domestic and warehousing divisions has assisted
an improved financial performance from our Australian division. Two new regional
branches (Toowoomba, Queensland and Bendigo, Victoria) are expected to open by
year end, extending our Australian network to 53 branches.

Sales revenues increased 13.7% to AU$292.91 million, and EBITDA levels improved
29.4% to AU$20.83 million.

Both Domestic Transport volumes and Logistics warehousing activity continue to
increase as the pre-Christmas season influences October and November trading.
Air & Ocean activity remains subdued compared to the prior period.

Asia (US$)
A disappointing performance from our Asian operations. Whilst headline revenue
growth is satisfactory, gross margins were adversely affected by the decline in
inter-company airfreight revenue.

Sales revenues increased 19.6% to US$37.61 million. EBITDA levels declined 52.70%
on those of the prior period to US$2.03 million.

Senior management changes took effect from early October, with an ongoing focus on
branch profitability improvement.


The Americas (US$)
A disappointing six months from our operations in the Americas.

Revenues declined 10.20% to US$203.06 million, and EBITDA performance reduced
14.0% to US$8.44 million, down US$1.37 million on the prior period.

The largest contributor to revenue and EBITDA decline was our Air & Ocean division,
where the loss of a significant airfreight import account impacted our returns. When
extracting this one-off large customer, divisional trading has seen market share and
freight volumes improve.

The Domestic Transport and Logistics divisions did not achieve trading expectations
during the period.

In the CaroTrans wholesale business, revenue levels were stable compared to the prior
period, halting the decline of the previous two years. Gross margin levels declined
slightly. A senior management change also took effect in CaroTrans from 7
th
June
2017, with a clear mandate to improve quality and sales growth.

Activity across all USA divisions improved through September and October, and we
would expect to see results at year end similar to the 2017 full year.

Europe (Euro €)
Ongoing improvement in our European business units sees revenues up 19.1% over
the same period last year to €162.51 million, an increase of €26.03 million, and EBITDA
up 9.8% to €8.40 million.

Our Logistics operation has contributed significantly to this result, whilst absorbing set-
up costs for an additional 26,000m
2
warehouse facility in The Netherlands. Further
warehousing sales gains have been signalled subsequent to the half year, and will
require investment in additional facilities in The Netherlands and Belgium.

Domestic forwarding is showing small progress across all countries with freight
volumes markedly increasing during October, and now into November. Our new
cross-dock facility has opened and is operational in Genk, Belgium.

Our Air & Ocean business continues to find good growth and is contributing to our
profitability. Network expansion has seen our first Italian operation opened in Milan on
4
th
September 2017, and it is pleasing to see that branch contributing positively.

Trading through October and November remains ahead of the year prior.


Group Operating Cash Flows
Operating cash flows were NZ$57.15 million compared to the prior year’s half year
figure of NZ$52.03 million.

During the half year, net capital expenditure totalled NZ$32.34 million, of which NZ$7.68
million related to property development, NZ$11.0 million to software development with
the balance relating to plant and equipment across Europe, New Zealand and Australia.


Dividend
The Directors of Mainfreight have approved an interim dividend of 19.0 cents per share,
up 2.0 cents on last year’s interim dividend level, reflecting current profit levels and
ongoing confidence for further improvement at the year end result.

This dividend will be fully imputed and will be paid on 15 December 2017, with books
closing on 8 December 2017. A supplementary dividend will be paid to non-resident
shareholders.


Outlook
Whilst our expectations were higher for our first half result, to still be ahead of what was
a strong performance in the prior period is a credit to our team, particularly in
New Zealand, as they worked through the logistical difficulties and increased costs
resulting from the Kaikoura earthquake.

With rail services reinstated and functioning to the South Island from the start of
November, it is our expectation that our New Zealand Domestic operations will
outperform the corresponding prior period in this next six months.

Our Australian businesses have significant momentum, and we expect full year results
for this region to be at record levels.

Our European businesses continue to outperform the year prior, and we are seeing
incremental improvements in Asia and the Americas as our new leadership teams settle
into their roles.

It is our expectation that this current momentum will continue into the New Year, and will
deliver another improved full year 2018 result.

Mainfreight will release its financial results for the full 2018 financial year to the market
on 29 May 2018.

For further information, please contact Don Braid, Group Managing Director,
telephone +64 9 259 5503, +64 274 961 637 or email don@mainfreight.com.

---

PRELIMINARY HALF YEAR REPORT ANNOUNCEMENT
Mainfreight Limited
For Half Year Ended 30 September 201
7
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 gives a true
The Listed Issuer has a formally constituted Audit Committee of the Board of Directors.
Income Statement for the Six Months Ended 30 September 2017
Note30 Sept30 Sept31 March
201720162017
$000$000$000
Operating Revenue1,225,583 1,142,437 2,333,088
Interest Income- - 503
Total Revenue1,225,583 1,142,437 2,333,591
Transport Costs(748,541) (701,578) (1,432,556)
Labour Expenses Excluding Share Based Payments(266,441) (242,085) (476,256)
Occupancy Expenses and Rental Recharge(35,727) (31,790) (65,792)
Depreciation and Amortisation Expenses(23,115) (21,454) (43,492)
Other Expenses(86,108) (80,636) (160,942)
Finance Costs(3,927) (3,790) (7,728)
Non-cash Share Based Payment Expense- (55) (55)
Profit Before Abnormal Items and Taxation for the Year61,724 61,049 146,770
Income Tax on Profit Before Abnormal Items(18,952) (18,723) (43,606)
Net Profit Before Abnormal Items for the Year42,772 42,326 103,164
Abnormal Items4(906) (679) (2,448)
Income Tax on Abnormal Items4351 201 807
Abnormal Items After Taxation4(555) (478) (1,641)
Profit Before Taxation for the Year60,818 60,370 144,322
Income Tax Expense(18,601) (18,522) (42,799)
Net Profit for the Year42,217 41,848 101,523
Earnings per share for profit attributable to the ordinary equity holders of the company are:
CentsCentsCents
Basic Earnings Per Share:Total Operations41.9241.79101.10
Diluted Earnings Per Share:Total Operations41.9241.70100.97
Statement of Comprehensive Income for the Six Months Ended 30 September 2017
Net Profit for the Year42,217 41,848 101,523
Other Comprehensive Income
Other comprehensive income to be reclassified to profit or loss in subsequent periods:
Exchange Differences on Translation of Foreign Operations(1,198) (13,248) (5,260)
Income Tax effect- - (2,155)
Net Other comprehensive income to be reclassified to profit (loss) in subsequent periods(1,198) (13,248) (7,415)
Other comprehensive income not to be reclassified to profit or loss in subsequent periods:
Revaluation of Land including Foreign Exchange Movements356 (780) (789)
Income Tax effect- - -
Net Other comprehensive income not to be reclassified to profit (loss) in subsequent periods356 (780) (789)
Other comprehensive income not to be reclassified to profit or loss in subsequent periods:
Defined Benefit Pension Provision(29) - (635)
Income Tax effect- - 215
Net Other comprehensive income not to be reclassified to profit (loss) in subsequent periods(29) - (420)
Other Comprehensive Income for the Year, Net of Ta
x(871) (14,028) (8,624)
Total Comprehensive Income for the Year, Net of Ta
x41,346 27,820 92,899
and fair view of the matters to which the report relates and is based on unaudited financial statements.

Balance Sheet as at 30 September 2017
30 Sept30 Sept31 March
201720162017
$000$000$000
Current Assets
Bank67,487 76,486 75,312
Trade Debtors330,872 304,443 314,888
Income Tax Receivable644 - 1,829
Properties Available for Sale- 2,240 -
Other Debtors51,170 38,732 48,008
450,173 421,901 440,037
Non-current Assets
Property, Plant & Equipment586,300 556,534 570,706
Software45,326 39,142 43,086
Goodwill204,093 198,974 200,721
Brand Names11,262 10,693 10,546
Other Intangible Assets10,065 12,058 10,814
Deferred Tax Asset8,851 7,905 8,855
865,897 825,306 844,728
TOTAL ASSETS1,316,070$ 1,247,207$ 1,284,765$
Current Liabilities
Bank- - 947
Trade Creditors & Accruals280,521 258,813 261,206
Employee Entitlements50,698 42,846 47,907
Provision for Taxation7,569 4,275 14,121
Finance Lease Liability1,838 1,896 1,801
340,626 307,830 325,982
Non-current Liabilities
Bank Term Loan284,892
312,561 283,029
Employee Entitlements745 715 3,800
Deferred Tax Liability24,462 25,698 23,879
Finance Lease Liability2,565 2,761 2,473
312,664 341,735 313,181
Shareholders' Equity
Share Capital385,821 85,821 85,821
Accumulated Surplus539,668 478,165 521,619
Revaluation Reserve50,972 51,523 50,616
Foreign Currency Translation Reserve(13,232) (17,867) (12,034)
Defined Benefit Pension Reserve(449) - (420)
TOTAL EQUITY662,780 597,642 645,602
TOTAL LIABILITIES AND EQUITY1,316,070$ 1,247,207$ 1,284,765$
The accompanying notes form an integral part of these financial statements.

Statement of Changes in Equity for the Six Months Ended 30 September 2017
Six Months to 30 September 2017ForeignDefined
AssetCurrencyBenefit
OrdinaryRevaluationTranslationPensionRetained
SharesReserveReserveReserveEarningsTOTAL
Balance at 1 April 201785,821 50,616 (12,034) (420) 521,619 645,602
Profit for the Period42,217 42,217
Other Comprehensive Income356 (1,198) (29) (871)
-
Total Comprehensive Income for the
P- 356 (1,198) (29) 42,217 41,346
Transactions with Owners in Their Capacity as Owners:
Shares Issued-
Executive Share Scheme Costs -
Supplementary Dividends(824) (824)
Dividends Paid(24,168) (24,168)
Foreign Investor Tax Credit824 824
Balance at 30 September 201785,821 50,972 (13,232) (449) 539,668 662,780
Six Months to 30 September 2016ForeignDefined
AssetCurrencyBenefit
OrdinaryRevaluationTranslationPensionRetained
SharesReserveReserveReserveEarningsTOTAL
Balance at 1 April 201673,912 52,303 (4,619) 459,477 581,073
Profit for the Period41,848 41,848
Other Comprehensive Income(780) (13,248) (14,028)
-
Total Comprehensive Income for the
P- (780) (13,248) - 41,848 27,820
Transactions with Owners in Their Capacity as Owners:
Shares Issued11,854 11,854
Executive Share Scheme Costs 55 55
Supplementary Dividends(652) (652)
Dividends Paid(23,160) (23,160)
Foreign Investor Tax Credit652 652
Balance at 30 September 201685,821 51,523 (17,867) - 478,165 597,642
Twelve Months to 31 March 2017ForeignDefined
AssetCurrencyBenefit
OrdinaryRevaluationTranslationPensionRetained
SharesReserveReserveReserveEarningsTOTAL
Balance at 1 April 201673,912 52,303 (4,619) 459,477 581,073
Profit for the Period101,523 101,523
Transfer of Revaluation Reserve for Land Sold (898) 898 -
Other Comprehensive Income(789) (7,415) (420) (8,624)
-
Total Comprehensive Income for the
P- (1,687) (7,415) (420) 102,421 92,899
Transactions with Owners in Their Capacity as Owners:
Shares Issued11,854 11,854
Executive Share Scheme Costs 55 55
Supplementary Dividends(1,212) (1,212)
Dividends Paid(40,279) (40,279)
Foreign Investor Tax Credit1,212 1,212
Balance at 31 March 201785,821 50,616 (12,034) (420) 521,619 645,602

Cash Flow Statement for the Six Months Ended 30 September 2017
Group
Note30 Sept30 Sept31 March
201720162017
$000$000$000
Cash Flows From Operating Activities
Receipts from Customers1,389,656 1,289,127 2,307,424
Interest Received- - 503
Payments to Suppliers and Team Members(1,304,324) (1,215,332) (2,132,227)
Interest Paid(3,927) (3,790) (7,729)
Income Taxes Paid(24,257) (17,971) (36,745)
NET CASH FLOWS FROM OPERATING ACTIVITIES57,148 52,034 131,226
Cash Flows From Investing Activities
Proceeds from Sale of Property, Plant & Equipment1,198 2,553 5,822
Proceeds from Sale of Software- - 38
Repayments by Team Members213 4 4
Purchase of Property, Plant & Equipment(22,944) (22,429) (47,696)
Purchase of Software(10,592) (8,032) (19,603)
Advances to Team Members(6) (4) (212)
Establishment of Franchises and Subsidiaries- - -
NET CASH FLOWS FROM INVESTING ACTIVITIES(32,131) (27,908) (61,647)
Cash Flows From Financing Activities
Proceeds of Long Term Loans- - -
Proceeds of Share Issues- 11,854 11,854
Dividend Paid to Shareholders(24,168) (23,160) (40,279)
Repayment of Loans(7,730) (25,166) (57,131)
NET CASH FLOWS FROM FINANCING ACTIVITIES(31,898) (36,472) (85,556)
NET INCREASE / (DECREASE) IN CASH AND CASH EQUIVALENTS(6,881) (12,346) (15,977)
Net Foreign Exchange Differences3 (3,904) (2,394)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD74,365 92,736 92,736
CASH AND CASH EQUIVALENTS AT END OF PERIOD67,487 76,486 74,365
Comprised
Bank and Short Term Deposits67,487 76,486
75,312
Bank Overdraft- - (947)
67,487 76,486 74,365
The accompanying notes form an integral part of these financial statements.

1Corporate Information
The preliminary half year report announcement of Mainfreight Limited ("the parent") and its subsidiaries ("the Group")
for the six months ended 30 September 2017 were 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 2017 financial statements.
3
Required NZX Disclosures
Movements in Ordinary Shares on IssueParent
30 Sept30 Sept31 March
201720162017
SharesSharesShares
Closing Balance100,698,548 100,698,548 100,698,548
At 30 September 2017 there were no partly paid shares outstanding (2016 nil).
Between 30 May 2016 and 29July 2016 a total of 1,125,000 redeemable ordinary shares were fully paid by the participants
at an average price of $10.56 per share. 75,000 partly paid redeemable ordinary shares were cancelled on 29 July 2016.
Net Tangible Assets437,360 375,917 423,521
Net Tangible Assets per Security (cps)434.33373.31420.58
Dividends Paid and Propose
d
Group
30 Sept30 Sept
20172016
$000$000
Recognised Amount
s
Declared and Paid During the Year to Parent Shareholders
Final Fully Imputed Dividend for 2017: 24.0 cents (2016: 23.0 cents)24,168 23,160
24,168 23,160
Unrecognised Amount
s
Interim Fully Imputed Dividend for 2018: 19.0 cents (2017: 17.0 cents)19,133 17,119
After the balance date, the above unrecognised dividends were approved by directors' resolution dated 14 November 2017.
These amounts have not been recognised as a liability as at 30 September 2017 but will be brought to account in the full
year to 31 March 2018.

4Abnormal Items
During the six months the Group had $906,000 of abnormal expenses (September 2015 $679,000). The related after tax
expense was $555,000 (September 2015 $478,000).
These items comprised of:
Group
September 2017 Six MonthsPre-TaxTaxAfter Tax
$000$000$000
American & European Redundancies(906,000) 351,000 (555,000)
(906,000) 351,000 (555,000)
Group
September 2016 Six MonthsPre-TaxTaxAfter Tax
$000$000$000
NZ, USA, Asian & European Redundancies(679,000) 201,000 (478,000)
(679,000) 201,000 (478,000)

5Segmental Reporting
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 accounting policies of the operating segments are the same as those described in the notes in note 2 with the exception of
deferred tax and the fair value of derivative financial instruments which are not reported on a monthly basis.
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 2017 and 30 September 2016. Inter segment transactions are entered into on a fully commercial basis.
2017
NewAustraliaTheAsiaEuropeInter-$000
ZealandAmericasSegmentGroup
Operating Revenue
-sales to customers 316,867 314,319 284,037 52,611 257,749 - 1,225,583
outside the group
-inter-segment sales109 9,187 19,435 26,720 13,076 (68,527) -
Total Revenue316,976 323,506 303,472 79,331 270,825 (68,527) 1,225,583
EBITDA38,446 22,351 11,809 2,833 13,327 - 88,766
Depreciation & Amortisation10,223 3,542 2,814 323 6,213 - 23,115
Capital Expenditure15,710 3,021 2,506 165 10,936 - 32,338
Trade Receivables79,202 94,466 77,863 20,316 76,103 (17,078) 330,872

Non-current Assets370,796 176,763 83,630 17,850 216,858 - 865,897
Total Assets438,047 305,432 188,813 55,733 345,123 (17,078) 1,316,070
Total Liabilities196,502 154,307 104,465 27,516 187,578 (17,078) 653,290

2016
NewAustraliaTheAsiaEuropeInter-$000
ZealandAmericasSegmentGroup
Operating Revenue
-sales to customers 287,546 273,950 319,798 44,481 216,662 - 1,142,437
outside the group
-inter-segment sales550 8,003 8,167 47,443 9,316 (73,479) -
Total Revenue288,096 281,953 327,965 91,924 225,978 (73,479) 1,142,437
EBITDA37,163 17,110 13,878 6,052 12,145 - 86,348
Depreciation & Amortisation9,263 3,427 2,613 295 5,856 - 21,454
Capital Expenditure16,105 3,643 3,258 163 4,739 - 27,908
Trade Receivables80,532 82,122 82,730 18,730 60,802 (20,473) 304,443

Non-current Assets352,877 171,955 84,091 17,984 198,399 - 825,306
Total Assets437,129 275,763 193,025 55,097 306,666 (20,473) 1,247,207
Total Liabilities211,279 144,386 114,891 29,078 170,404 (20,473) 649,565

Reconciliation between Se
gment EBITDA and the Income Statement20172016
$000$000
Profit from Operations Before Abnormal Items and Taxation for the Year61,724 61,049
Interest Income- -
Derivative Fair Value Movement- -
Non-cash Share Based Pa
yment Expense- 55
Finance Costs3,927 3,790
Depreciation & Amortisation23,115 21,454
EBITD
A88,766 86,348
EBITDA is defined as earnin
gs before net interest expense, tax, depreciation, amortisation, abnormal items, royalties, share based payment
expense, minority interests and associates.
There are no customers in any segment that comprise more than 10% of that segment's revenue.
The gegraphical segments are determined based on the location of the Group's assets.

APPENDIX 7 – NZSX Listing Rules
Number of pages including this one
(Please provide any other relevant
NZSX Listing Rule 7.12.2. For rights, NZSX Listing Rules 7.10.9 and 7.10.10.details on additional pages)
For change to allotment, NZSX Listing Rule 7.12.1, a separate advice is required.
Full name
of Issuer
Name of officer authorised to
Authority for event,
make this notice
e.g. Directors' resolution
Contact phone
Contact fax
numbernumberDate
Nature of event
BonusIf ticked,Rights Issue
Tick as appropriateIssuestate whether:Taxable/ Non TaxableConversionInterestRenouncable
Rights IssueCapitalCallDividend
If ticked, stateFull
non-renouncable
change
X
whether:
Interim
X
YearSpecialDRP Applies
EXISTING securities affected by this
If more than one security is affected by the event, use a separate form.
Description of theISI
N
class of securities
If unknown, contact NZX
Details of securities issued pursuant to this eventIf more than one class of security is to be issued, use a separate form for each class.
Description of theISI
N
class of securities
If unknown, contact NZX
Number of Securities toMinimum
Ratio, e.g
be issued following eventEntitlement
1 for 2 for
Conversion, Maturity, Call
Treatment of Fractions
Payable or Exercise Date
Tick i
f
provide an
pari passu
ORexplanation
Strike price per security for any issue in lieu or date
of the
Strike Price available.
ranking
Monies Associated with Event
Dividend payable, Call payable, Exercise price, Conversion price, Redemption price, Application money.
Source of
Amount per security
Payment
(does not include any excluded incom
e
Excluded income per security
(only applicable to listed PIEs)
Supplementary
Amount per security
Currencydividendin dollars and cents
details -
NZSX Listing Rule 7.12.7
Total monies
TaxationAmount per Security in Dollars and cents to six decimal places
In the case of a taxable bonusResident
Imputation Credit
s
issue state strike priceWithholding Tax(Give details)
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FWP Credits
Withholding Tax(Give details)
Timing
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Record Date 5pm
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For calculation of entitlements -Also, Call Payable, Dividend /
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Notice Date
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Entitlement letters, call notices,For the issue of new securities.
conversion notices mailedMust be within 5 business days
of application closing date.
OFFICE USE ONLY
Ex Date:
Commence Quoting Rights:Security Code:
Cease Quoting Rights 5pm:
Commence Quoting New Securities:
Security Code:
Cease Quoting Old Security 5pm:
$
8 December, 201715 December, 2017
$19,132,724
Date Payable
15 December, 2017
$
$0.013194$0.073889
In dollars and cents
Revenue
$0.190
NZ $$0.033529
Enter N/A if not
applicable
(09) 259 5500(09) 270 7402
14112017
Ordinary SharesNZMFTE0001S9
EMAIL: announce@nzx.com
Notice of event affecting securities
Mainfreight Limited
Tim WilliamsDirectors Resolution