MOVE Logistics has reported lower earnings and revenue in the 2023 financial year, attributed to “disappointing” results in the freight division.
The Kiwi transport and logistics company saw full-year income decrease 4.5% to NZ$347.7 million and EBITDA fall 16% to NZ$47.4 million. It posted a net loss after tax of NZ$7.2 million.
Move said higher interest rates, inflationary pressures and weather events had caused a reduction in customer activity.
The freight business was the only division that failed to bring in revenue gains. Its revenue dropped 19% to NZ$146 million and its EBITDA plunged 50% to NZ$9.3 million.
“Move delivered a softer result in FY23, primarily as a result of economic headwinds and a disappointing result from the freight business as the improvement program continues,” Move CEO Craig Evans told investors on Wednesday.
Move CFO Lee Banks said the results reflected the challenging operating and economic conditions as well as the ongoing work to stabilise the business.
“This result reflects investment into growth initiatives, including the new ocean service and technology, which combined, had a $3.4 million negative impact on the EBITDA reported,” she said.
She said the decline in EBITDA was predominantly due to the lower freight result, with the decrease in freight revenue driven in part by the rate realignment in FY22.
“Net capital expenditure increased in FY23 with the acquisition of the new vessel and our continued investment into technology,” she said.
Move commenced a new shipping service under its oceans division in January 2023. In October 2022 it purchased a vessel to be deployed on a new trans-Tasman route
The group said its oceans business is acting as a revenue stream for the wider group by feeding into the freight and warehousing businesses.
“There is significant potential to build this part of Move’s supply chain, and we are looking to grow our team and capability to increase efficiency to make the most of the opportunity available to us,” Mr Evans said.
“The costs associated with the start-up of the new trans-Tasman shipping route as well as lower international freight demand, as seen across the industry resulted in a year-on-year reduction in EBITDA for the division.”
Mr Evans said there have been new customer relationships across the Tasman as a result of the oceans strategy.
“Our new trans-Tasman shipping route is opening up new opportunities for us, and we’ll be building on these over the next year,” he said.
Looking forward, Mr Evans said the company has “Australasian aspirations” and hopes to find partners in Australia to aggregate cargo back to New Zealand, support the ship and supply landside services.
“That’s the less-risk strategy that we’ll do, and we’ll earn our way into that market.”
Move expects a softer year in FY24 as customer activity slows in response to economic conditions.