EROAD moves into profit in record year of growth

5 MinutesBy NZ Trucking magazineMay 18, 2018

EROAD Limited has reported record growth of total contracted units in both Australia and New Zealand and North American markets of 61.5%, revenue of $51.5 million, EBITDA of $15.0 million and net profit after tax of $0.2 million.

Strong growth in the ANZ business has been driven by increased penetration in light vehicle fleets and continued focus on health and safety.

In New Zealand EROAD continued expansion into light commercial vehicles and existing customer fleets, including some of its major enterprise customers. EROAD rounded out its portfolio of health and safety products with new driver and vehicle safety features to support record growth, and introduced charging for the new features.

“We have continued to strengthen our leading position in Australia and New Zealand; with sales in the second half of the year surpassing our previous sales record in the first half of the year,” said chief executive officer Steven Newman.

The company continued to build on its track record of innovation and disruption, with the first tethered in-cab ELD solution to be registered with the FMCSA (Federal Motor Carriers Safety Administration) and the first independently verified ELD to be launched to the North American market. The quality of its ELD development was recognised in New Zealand where it won Project of the Year at the Project Management Institute of NZ (PMINZ) Awards.

The company‘s business in ANZ recorded four consecutive record sales quarters.

EROAD continued to increase its share of RUC in New Zealand, collecting 42% of all heavy vehicle RUC, up from 38% in 2017, and 81% of all eRUC (electronic RUC). In June 2017, a major milestone was reached, with eRUC payments in New Zealand overtaking paper RUC payments for the first time. At the end of Fy18 EROAD had collected $1.9 billion in RUC since it began offering its services to customers.

An additional 7,863 units were added in ANZ in the first half of FY18, a record that was surpassed in the second half of the year, with a further 10,041 units added. These 17,904 additional units in ANZ amounted to 42.7% annual growth in what is still a growing market.

A key driver for growth in ANZ was increased penetration into key enterprise fleets, many of which followed up installation of EROAD in their heavy vehicles with light vehicles to meet health and safety obligations.

“Our focus on solving complex problems for our customers applies to light as well as heavy vehicles,” Newman said. “Both are subject to the same health and safety requirements, and are discovering that preventative safety is key to improving road safety and compliance – as well as reducing costs.”

The majority of sales in Australia continued to be mainly New Zealand customers with Australian operations. EROAD‘s Australian solution continued to focus on health and safety and fleet management requirements. In December the Australian Federal Government announced a heavy vehicle charging pilot in response to the potential rapid adoption of electric vehicles in the freight sector. EROAD is well positioned to support and participate in this trial, drawing on its experience with road charging pilot programmes in Oregon and California.

Newman said the company expected continued solid growth in its New Zealand business, with further adoption of telematics by light commercial fleets to meet health and safety requirements, and customers continuing to upgrade from Ehubo1 (its first-generation in-vehicle hardware device) to Ehubo2. He said signs were promising in Australia that more significant opportunities were on the way, particularly with changes to chain of responsibility laws due to be introduced in FY19.