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KiwiRail posts $85.5m earnings

NZN 26/08/2016 By Pattrick Smellie

KiwiRail posted earnings before interest, tax, depreciation and finance costs of $85.5 million in the year to June 30, down $5m on the previous year despite a 300,000 tonne reduction in Solid Energy coal freight and lower milk volumes because of a shorter-than-normal season.

Revenue for the year fell 3.7 per cent to $694m, while operating expenses improved by 1.9 per cent, falling to $618.9m as the business reorients to being as efficient as possible in what it calls its 'above-rail' business, while continuing to book government-subsidised losses once the costs of the country's rail infrastructure are taken into account.

The ebit result is in line with the company's Statement of Corporate Intent targets. It does not pay dividends to the Crown.

Strong growth in tourism numbers saw the Scenic Journeys passenger trains clock up a 19.8 per cent increase in revenue, although the segment remains the company's smallest, at $29.7m.

Freight revenues fell 10.1 per cent to $389.8m, the Interislander ferries' turnover was flat at $127.6m, and Tranz Metro suburban passenger train services generated 11.2 per cent more revenue than the previous year, at $59.7m.

The statutory loss for the year was $194m, up from $166.5m the previous year, with the government having committed to inject sufficient capital into KiwiRail on an ongoing basis to allow it to keep operating.

Contributing to the larger loss was also a 26.2 per cent reduction in capital grants from Auckland and Wellington regional transport bodies as passenger network upgrade projects undertaken by KiwiRail in both cities wind down.

Import/export freight volumes had grown 11 per cent.

Chief executive Peter Reidy said in an interview that the company had successfully reduced its cost base and expected to book savings of $27m this year, with an annualised value of $38m.


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