KiwiRail announces improved annual results
28 August 2015 1:01PM
KiwiRail’s net operating surplus¹ of $91m for the year to June 30, 2015, is a 17% improvement over the previous year and is a credible result in the current environment, KiwiRail Chairman John Spencer says.
KiwiRail today announced its results for the 2014/15 financial year and reported a higher net operating surplus despite revenue falling by 3% to $721m.
“In line with our commitment to lift KiwiRail’s financial performance the company is focusing on customers’ needs and working with our employees and unions to improve efficiency,” Mr Spencer says.
“It is pleasing that our Interislander, Scenic Journeys and Property business groups all increased their revenues. Higher passenger numbers saw Interislander’s revenue grow 9% to $127m and Scenic Journeys’ revenue increase 18% to $25m. Property’s revenue increased 20% to $43m in line with a stronger commercial focus on returns from our property assets.”
Freight revenue fell by 6% to $434m. Bulk freight revenue was down, although reduced coal volumes from Solid Energy were partially offset by higher Fonterra milk volumes. Forestry, Import/Export and Domestic freight categories together performed slightly ahead of last year.
The net loss for the year of $167m is an improvement of 33% on last year. The net loss reflects the impairment of KiwiRail’s rail assets. As the rail network does not generate sufficient cashflows to cover the level of required investment, a large proportion of the accounting value must be written off each year.
Chief Executive Peter Reidy says that alongside the improved financial performance, he is pleased to see managers and staff taking active steps to improve safety, and significantly reducing injury rates.
“Safety continues to be an important measure of leadership and I am pleased that the Total Recordable Injury Frequency Rate reduced by 50% over the previous year, and the Lost Time Injury Frequency Rate reduced by 36%.
“Overall, today’s announcements reflect a company where staff are responding to the momentum for positive change. The financial challenges of maintaining a 4000km network with a backlog of work means we will rely on Crown support for the foreseeable future. However, our productivity and efficiency initiatives are contributing to a better performance and we are seeing that reflected in our results.
“The outlook for the next financial year remains challenging, particularly given our exposure to global commodity markets. However, there are more productivity gains to be made.
“By continuing this cultural and organisational change, and focussing on costs, we expect to reduce the level of Crown support required over time.”
¹ Net operating surplus represents earnings before depreciation, amortisation and impairment
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