By NZPA
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Wednesday 21st February 2007 |
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Operating profit fell to $24.2m from $30.3m,
However, it said the second half had started well, albeit behind the same period a year earlier, and it remained confident of a stronger second half of the year.
The company, 83.5% owned by Australian's Toll Holdings, said no interim dividend would be paid as capital spending of $24m on trains, had consumed cash flow.
The parent, Australia's biggest transport company, posted an 87% rise in first-half profit to $A215m ($NZ244m) after doubling revenues through acquisitions.
It said all elements of the group performed very well, apart from New Zealand.
The reduction in Toll NZ's operating profit was primarily driven by margin contraction in the Toll Rail and Interislander businesses, the company said.
Underlying revenue after adjusting for the sale of refrigerated business and a fuel surcharge, increased by $26m to $366m, with continued strength across the business particularly in coal, domestic distribution, import/export and rail passenger.
During the period, the company ran trials of larger coal trains from the West Coast, which if successful, would improve efficiency.
The relaunch of the Overlander train, after Toll had threatened to close it, but reinstated it after widespread public protests, had led to a strong rise in passenger volumes.
The company said it did not expect to be in a position to pay dividends "in the foreseeable future".
Toll Holdings was blocked by minorities from making a full takeover of the company and some analysts believe not paying dividends will encourage minorities to quit the stock.
Toll said its long running talks with the Government and track operator OnTrack had not yet been concluded, but it was confident of a long term settlement "in the very near future".
Toll shares closed down 5 cents on $2.70.
Toll Holdings, which acquired Australian ports operator Patrick Corp last year, said trading since December was ahead of expectations and tipped a strong year as it prepares to spin off $A8 billion ($NZ9 billion) worth of infrastructure assets into a new company.
"Throughout the business, there is enthusiasm to complete the restructure and move to an exciting new phase of growth," Managing Director Paul Little said in a statement.
Shares in Toll in Australia, which have risen about 50% since the end of June, were 1.3% weaker at $A20.88.
It was Toll's first set of results to include its acquisition of Patrick and Singapore-based SembCorp Logistics for a combined $A7 billion last year.
Toll is now waiting on regulatory clearance for plans to split into two companies, a move which will free up capital for the logistics arm to expand in Australia, New Zealand and Asia.
After the proposed split, Toll Holdings will have $A5.5 billion worth of assets, made up of the group's Australian, New Zealand and Asian logistics businesses and the 62.3% stake in airline Virgin Blue Australia that Toll inherited from Patrick.
The new infrastructure company will own $A8 billion in assets, made up of Australia's biggest rail freight network, Pacific National, and Patrick ports and will be headed by Toll group executive director Mark Rowsthorn.
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