A MOVe Logistics branded truck. Photo: Supplied
Transport and logistics company Move Logistics is expecting a difficult first half result as softer economic conditions weigh on demand.
The company said its first-half underlying earnings were expected to be between $11.5 million and $12.5m, compared to its 2023 interim underlying result of $21.9m.
Move said it reflected lower customer demand, the ongoing reset of its freight business, the start-up of its sea freight service and reduced fuel volumes.
"Economic and sector headwinds continue to impact on the sector, with inflationary cost pressures and slowing consumer spending dampening down demand and driving competitive pricing pressure, particularly for freight and warehousing," the company told the share market.
It said in order to improve efficiency, the company has escalated its "comprehensive cost out programme".
"As previously advised, the reset of the freight business is ongoing with a short-term reduction in earnings as it transitions towards a more efficient, higher margin business model.
"The business is being right-sized to create a leaner, more efficient structure which can be scaled as the growth strategy takes hold."
It said its pilot of its new trans-Tasman shipping line faced challenges, but showed good potential.
A number of costs associated with the new service would be recognised in the 2024 results, it said.
Chief executive Craig Evans said the company's initial focus was to recover to prior performance levels.
"Frustratingly, the speed at which we have been able to execute on our growth strategy has been hampered by headwinds affecting the logistics sector, which have been longer and tougher than anticipated.
"We continue to tightly manage all areas within our control and are positioning ourselves to take advantage of increasing demand as economic conditions improve."