By Phil Boeyen, ShareChat Business News Editor
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Thursday 9th May 2002 |
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On a nine-month basis the company says it has recorded a cumulative net profit of $46.1 million compared with $6.4 million previously. The result includes $64.1 million from the sale of the Tranz Scenic passenger rail business and the Auckland rail corridor.
Total third quarter revenue of $152 million was $19.1 million lower than last year, mostly as a result of a 13.4% fall in freight revenue to $103.1 million.
The company says the drop in freight revenue reflects lower volumes in forestry and the 'one off' effects in last year's results of the expansion of Port of Tauranga's Metroport service.
"Forestry products revenue was affected by the company's strategy to exit low margin traffic where adequate returns were not being achieved and capital expenditure would otherwise have been required to upgrade the equipment," the company reports.
"Additionally, volumes in the current quarter were affected by the cutting of trees further away from the railway lines, leaving timber to be carried by road rather than rail. Some business was also switched from rail to coastal shipping."
MD Michael Bears says passenger revenue for The Interisland Line and Tranz Metro continued to grow, although the effect of excluding Tranz Scenic long distance passenger revenue reduced overall passenger revenue by 7.7% compared to last year.
"A significant outcome for the period was the 9.4% reduction in operating costs from $152.7 million in 2001 to $138.3 million for the third quarter in 2002."
Michael Beard says the latest quarter result was impacted by the costs of restructuring and that the cost of the company's change programme is proving to be greater than anticipated.
"Management will continue its focus on a quantum improvement in service levels to both mitigate these costs and improve its revenue line.
Going forward Tranz Rail says it is analysing its position to identify the strategic initiatives and budget for financial year 2003 and should be in a position to provide a more detailed commentary when it reports on the fourth quarter result.
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