Freightways Posts 12.9% Profit Rise Amid Strategic Growth Moves

Solid Financial Performance in a Challenging Market

Freightways Group Limited has reported a robust set of full-year results for the 12 months ending 30 June 2025, demonstrating resilience amid a tough economic backdrop. The company’s revenue climbed 6.6% to NZD 1.29 billion, while net profit after tax (NPAT) surged 12.9% to NZD 80.1 million. Notably, the EBITA margin held steady at 12.3%, reflecting disciplined cost management despite inflationary pressures easing compared to prior years.

The company’s diversified business model, spanning express package delivery, business mail, information management, and waste renewal services, has provided a buffer against economic headwinds, particularly in New Zealand where volume growth has been slow but improving in the latter half of FY25.

Growth Drivers – Australia and Strategic Investments

Australian operations, especially within the Express Package division, were a standout contributor with item volumes growing 11.6% for the year. Allied Express, Freightways’ Australian arm, benefited from new business wins, improved service quality, and operational efficiencies, including the rollout of automated sortation systems in major depots. These investments have enhanced capacity and accuracy, generating an additional NZD 2 million in margin in FY25 alone.

Meanwhile, the Big Chill 3PL superhub at Ruakura, opened in October 2023, has exceeded expectations by reaching break-even nine months ahead of schedule. This facility significantly expands temperature-controlled storage capacity and supports growing demand for third-party logistics services, a key strategic growth area for Freightways.

Operational Challenges and Strategic Responses

The Information Management and Waste Renewal division saw revenue growth of 9%, driven by digitisation and medical waste services. However, margins were pressured by one-off costs in the Waste Renewal segment, prompting management to focus on pricing strategies and network restructuring to restore profitability in FY26.

Freightways also faces operational risk following the receivership of Airwork, its joint venture partner in Parcelair. The company has contingency plans to maintain air network continuity and aims to transition to a more efficient fleet of 737-800 aircraft as leases expire, underscoring a proactive approach to managing supply chain risks.

Outlook – Cautious Optimism with Growth on the Horizon

Looking ahead to FY26, Freightways expects to grow both revenue and earnings, supported by modest economic recovery in New Zealand and continued momentum in Australia. The company plans to leverage pricing initiatives, operational efficiencies, and a disciplined approach to mergers and acquisitions, particularly targeting Australian express package businesses with revenues between NZD 50 million and 500 million.

Management remains focused on enhancing service quality to retain and attract customers across its niche brands, while scaling new lines of business such as oversize parcel delivery and same-day refrigerated services. The strategic emphasis on automation and 3PL expansion positions Freightways well to capitalize on evolving market demands.