Optimism for rail’s future despite difficult trading conditions
Despite difficult trading conditions over the first six months of the 2009-10 financial year, KiwiRail is making good progress towards a sustainable future, Chairman Jim Bolger said today.
"During the half year, we made considerable progress towards improving relationships with key customers and we took significant steps towards improving the reliability of the business. However, there is a lot more to do as highlighted by the recent issues in Wellington that affected our customers," he said.
"Freight carried on rail during the first six months of the financial year was only marginally down on the same period the year before. This was in spite of industrial action which reduced coal volumes carried."As we discuss with our shareholder a long term strategy for the rail industry, we can look forward to improved performance and a greater contribution to the New Zealand economy," he said.
Mr Bolger said highlights of the half year to December included agreement with Fonterra to move greater volumes of dairy produce by rail, the commitment to buying 20 new diesel electric locomotives and the commissioning of the Arahura Road-Rail bridge and new track maintenance equipment."
Our work on the Auckland and Wellington urban rail projects represents the biggest upgrades since the networks were first established. We were also mandated by the Government to manage the purchase to a budget of $500 million of Auckland's new electric trains."
Mr Bolger said comparisons between the half year to December 2009 and the half year to December 2008 were difficult because the former Toll and United Group businesses purchased in 2008 were only included in part of that year's reporting period.
For that reason, the comparison with targets set for the year in KiwiRail's Statement of Corporate Intent were more valid. This showed revenue just over eight percent below target but EBITDA almost 12 percent up on target.
The net profit after tax figure of $125.6 million is 66 percent below the SCI target. This is the result of timing of capital work on the Metro networks and careful capital expenditure management of KiwiRail's core business as discussions with the Government on the future of the business continue.
"Economic conditions are continuing to affect most of the business units although it's pleasing to note that long-distance passenger train traffic is running ahead of target.
Over the next six months, KiwiRail is looking to increase revenue and manage operating and capital expenditure. The EBITDA target for the full year of $59.6 million remains the company's objective.
Continuous disclosure
KiwiRail's financial results for the six months ended December 31 2009 are released today in accordance with the company's continuous disclosure policy which is consistent with the Government's Continuous Disclosure Rules for State Owned Enterprises which came into effect from 1 January 2010.
KiwiRail's full half year accounts will be published when they are tabled in Parliament.
Ends
Issued by KiwiRail
Media contact: Kevin Ramshaw, Public Affairs Manager
Phone 04 498 3231 / 0274 507 420
Click here to download a copy of the KiwiRail Half Year Report