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Report for the six months ended 31 December 2004

Report for the six months ended 31 December 2004. This presentation relates to the Freightways Limited NZX announcement and media release of 7 February 200 5 . As such it should be read in conjunction with, and is subject to the explanations and views contained in, those releases.

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Report for the six months ended 31 December 2004

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  1. Report for the six months ended 31 December 2004

  2. This presentation relates to the Freightways Limited NZX announcement and media release of 7February 2005. As such it should be read in conjunction with, and is subject to the explanations and views contained in, those releases.

  3. Financial Highlights

  4. 2nd Half 1st Half Operating Revenue • 10% revenue growth to Dec 2004 • 5 year compound average annualrevenue growth of 7%

  5. Where Revenue Growth Has Come From

  6. 2nd Half 1st Half EBITA • 28% EBITA growth to Dec 2004 • 5 year compound average annualEBITA growth of 18%

  7. Drivers of EBITA Growth • Leverage gained by adding revenue to established nationalinfrastructure • Disciplined margin focus relating to new business • Favourable business mix • Good cost control

  8. Cash Flows • Operational cash flows of $28m reflect strong EBITA result • Capital expenditure below budgeted expectation at this stage of the year • Borrowings reduced by $3m during the half year ending 31 December 2004

  9. Balance Sheet • Continuation of strong negative working capital position • Increase in fixed assets of $1m (net of depreciation) • Reduction in bank borrowings of $3m • Goodwill amortised over 20 years (charge of $5m p.a.)

  10. Interim Dividend

  11. Finance Facilities • Refinancing completed December 2004 to replace subordinated debt with core bank debt • Additional headroom negotiated of $22m • Interest savings of approximately $500k p.a. will flow from 1 July 2005 • New finance facility leverages existing documentation and covenants

  12. Business Strategy

  13. Strategy • Continued development of growth opportunities in Freightways’ existing three core markets • Positioning, People, Performance, Profit • Explore complementary growth opportunities • Invest in IT and infrastructure

  14. The Next SixMonths

  15. The Next Six Months • Economy favourable from Freightways’ perspective • Characteristics of competitive environment expected to remain unchanged despite competitors ownership change • Consistent application of proven market strategies • Expect to deliver a strong full year result • Business as usual

  16. Summary • Strong successful business • Positioned to deliver continuing earnings growth • Delivering an attractive dividend yield

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