Freightways Posts NZD 80.1m NPAT with 8% Dividend Hike

• FY25 revenue growth of 6.6% to NZD 1.29 billion
• Net profit after tax increased 12.9% to NZD 80.1 million
• Dividend raised 8% to 40 cents per share
• Q1 FY26 revenue and profit growth led by express package and business mail
• Strategic focus on expanding logistics services and climate transition initiatives

Navigating Challenging Markets

Freightways has once again demonstrated resilience in a tough economic environment, particularly in New Zealand where multiple quarters of negative GDP growth persisted through FY25. Despite these headwinds, the company achieved a commendable 6.6% increase in revenue to NZD 1.29 billion and a 12.9% rise in net profit after tax to NZD 80.1 million. This performance was underpinned by strong contributions from its Australian operations, where economic conditions proved more robust, and by continued market share gains in New Zealand driven by superior service delivery.

Financial Strength and Shareholder Returns

Freightways’ balance sheet remains solid, with gearing reduced to the lower half of its target range thanks to strong cash flow and disciplined capital management. Reflecting this financial strength and confidence in future prospects, the Board declared an 8% increase in the dividend to 40 cents per share, maintaining a consistent track record of shareholder returns over two decades. The company’s ability to sustain dividend growth through volatile periods highlights its operational stability and commitment to rewarding investors.

Q1 FY26 Trading Update Signals Momentum

The first quarter of FY26 has started positively, with revenue up 8.6% and net profit after tax rising 22.5% compared to the prior year. This growth was largely driven by the Express Package and Business Mail segment, which saw market share gains, modest same-customer growth, and effective pricing strategies that more than offset inflationary pressures. Operational efficiencies, particularly improved run density, also contributed to margin expansion. While the New Zealand economy is no longer a drag, it has yet to generate significant volume growth, and some signs of slowing in Australia warrant cautious optimism.

Strategic Initiatives and Climate Commitment

Freightways continues to invest in its core capabilities and growth areas, including expanding regional hubs in Christchurch and Palmerston North, scaling oversize freight services, and enhancing temperature-controlled logistics. The company is also advancing its Information Management and Waste Renewal businesses, targeting digitisation and circular economy solutions. Importantly, Freightways has released a Climate Statement outlining a Transition Plan focused on reducing emissions, managing climate-related risks, and supporting an economy-wide transition, signaling its commitment to sustainable operations.

Governance and Outlook

At the Annual Shareholders Meeting, directors David Gibson and Grant Devonport were put forward for re-election and election respectively, reflecting continuity and fresh perspectives on the Board. Looking ahead, Freightways anticipates modest volume growth in New Zealand as economic conditions improve, while maintaining a disciplined approach to margin restoration and selective mergers and acquisitions. The company’s focus remains on service quality to attract and retain customers across its niche markets, positioning it well for sustainable growth in FY26.

Bottom Line?

Freightways’ solid FY25 results and strong start to FY26 underscore its resilience and strategic focus, but economic uncertainties in key markets warrant close monitoring.

Questions in the middle?

• How will Freightways manage potential cost pressures from the planned air fleet transition?
• What inorganic growth opportunities is the company actively pursuing in FY26?
• How might slowing economic signals in Australia impact Freightways’ near-term performance?