Sharechat Logo

KiwiRail misses SCI targets for revenue, earnings

Wednesday 29th August 2012

Text too small?

KiwiRail, the state-owned railway company, missed its statement of corporate intent targets for full-year revenue and earnings because of weaker-than-expected returns from its passenger and Interislander units.

Operating revenue in the 12 months ended June 30 rose 7.2 percent to $715.8 million, the Wellington-based company said in a statement. The net operating surplus fell 24 percent to $77.6 million, including an $11.8 million writedown of inventory and a $15.6 million restructuring charge against its infrastructure and engineering business, which is to shed 181 jobs over the next six months.

The net result was a loss of $2.3 billion, mainly reflecting a $2.2 billion impairment as part of the already-announced $9.3 billion reduction in the value of its assets.

Revenue lagged behind KiwiRail's SCI target of $737 million and earnings before interest, tax, depreciation and amortisation was $35 million below target.

"KiwiRail will continue its focus on reducing costs, lifting efficiency and better managing infrastructure spending so that the expected earnings are delivered," chairman John Spencer said. "No one will thank us if we can't make this company sustainable and making a real contribution to the country's economy."

Freight, KiwiRail's biggest source of sales, continued to be the bright spot, with revenue rising about 15 percent to $457.6 million. The railway has won plaudits from companies including Port of Tauranga, which today posted a record annual profit and thanked KiwiRail for its work on the Auckland-Tauranga line.

Revenue from the Interislander rose 0.8 percent to $123.9 million, less than expected, denting earnings from that business by $4.7 million, reflecting the ongoing impact from the Christchurch earthquakes and extra costs from delays in the work to increase the size of the Aratere ferry.

Trans Metro, which operates commuter services in Wellington and Auckland, reported a 30 percent drop in revenue to $45.7 million, reflecting changes to funding arrangements that began in July last year. Trans Scenic revenue fell 5.5 percent to $20.3 million as the quakes continued to dent passenger numbers.

Bond Offer: Infratil Ltd, 7.2 year & 10.2 year unsecured unsubordinated bond

  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

ANALYSIS: Should penalties for continuous disclosure breaches be relaxed?
Fletcher seeks urgent talks on Ihumatao stalemate
NZ economy grows 0.5% in June quarter, beating expectations
Restaurant Brands lifts 2Q sales; appetite for KFC offsets ditched Starbucks
Auckland jet fuel arrangements a potential barrier to new entrants
NZ dollar weaker after Fed split on outlook for further US cuts
Leading judge says court administration model 'outdated'
MARKET CLOSE: NZ shares fall; Goodman placement sees property stocks sold
NZ dollar eases as market eyes pending GDP data
Evolve shareholders demand answers

IRG See IRG research reports