Trading Update

An update on unaudited trading performance for the three months ended 30 September 2005 is provided below.

For the first three months of the current financial year, Freightways has again demonstrated consistently strong trading to deliver another record result, well above the prior corresponding period. This performance has been achieved through the continuing support of our existing customers, good gains in market share and some pricing improvement. While some existing customers are trading at lower levels than for the same period last year, we have been able to offset this organic volume decline with the successful implementation of growth strategies in the market.

These strategies include investment in expanded sales teams, linehaul capacity and infrastructure in most of our businesses, designed both to assist the retention of existing customers and to attract new customers. Investment in these initiatives has resulted in a higher cost of sale than has been evident in recent years. The sales growth that we are already achieving through these strategies is expected to contribute to future sustainable earnings growth for Freightways.

During the quarter we completed the acquisition of Kiwi Express, a long established and successful point-to-point courier operating in Auckland and Wellington. We have also continued to innovate within the three markets we operate in of express package, business mail and information management to extend our service range to a broader customer base.

For the three months ended 30 September 2005 Freightways’ revenue totalled $62.4 million and Earnings Before Interest Tax and Amortisation (EBITA) amounted to $13.2 million. Compared to the prior corresponding period, this performance represents an increase in earnings of 12% and results in an increase in net profit after tax of 21%.

Results for the three (3) months ended 30 September (unaudited)

These latest results continue the strong historic performance of Freightways, as shown in the following graphs in relation to the last seven years’ financial performance (NB. Historic EBITA amounts for the years ended 30 June 1999 to 2003 have been presented on a pro-forma basis consistent with the Freightways Statement and Prospectus issues in August 2003).

Freightways Operating Revenue

Freightways EBITA

Outlook

The domestic New Zealand market from Freightways’ perspective is less buoyant than it has been in recent years, as evidenced by lower volumes from some existing customers. Freightways’ growth strategies are however offsetting this economy-related volume decline, as shown by the year on year improvement in this trading update. At this stage of our annual business cycle, and subject to factors beyond our control, the outlook for Freightways, its shareholders and all other stakeholders remains positive.

For further information please contact:

DEAN BRACEWELL
Managing Director
Freightways Limited
Ph: (09) 571 9670
Fax: (09) 571 9671