Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search


KiwiRail cuts earnings forecast as Aratere outage weighs

KiwiRail cuts annual earnings forecast as Aratere outage weighs, in talks with govt over finances

Feb. 28 (BusinessDesk) - KiwiRail, the state-owned rail service, has cut its forecast operating profit as the outage of the Aratere inter-island ferry weighs on earnings, and is in talks with the government to ensure it has enough cash to last the rest of the year.

The Wellington-based state-owned enterprise reported a 21 percent drop in operating profit to $37.3 million in the six months ended Dec. 31, as a 0.7 percent gain in revenue to $365.5 million was outpaced by a 3.9 percent lift in expenses to $328.2 million. The full results won’t be made public until they are tabled in Parliament. The SOE said it has renewed focus on cutting costs in new recruitment and major capital purchases.

KiwiRail cut its forecast operating profit to between $90 million and $100 million in the year ending June 30, a reduction of $20 million to $30 million from its Statement of Corporate Intent. It estimates the outage of the Aratere ferry, which is undergoing repairs after its propeller fell off in November, will cost between $20 million and $30 million in the financial year.

“The financial impact is significant and we are doing all we can to mitigate that impact,” chairman John Spencer said. “We are also in discussions with our shareholder to ensure we have the necessary financial capacity for the remainder of the year.”

KiwiRail has previously said it doesn’t expect to make a net profit within the next decade as it writes down the carrying value of its assets to market value, while investing in renewing its network.

The company’s domestic freight sector grew 11 percent in the period on increased export and liquid milk volumes, and anticipates further growth in log volumes. The Wellington passenger businesses, TranzMetro, increased passenger numbers in the half, and the Scenic passenger unit is showing signs of growth after a concerted marketing effort, KiwiRail said.


© Scoop Media

Business Headlines | Sci-Tech Headlines


Banks: Westpac Keeps Core Government Transactions Contract

The local arm of Westpac Banking Corp has kept its contract with the New Zealand government to provide core transactions, but will have to share peripheral services with its rivals. More>>


Science Investment Plan: Universities Welcome Statement

Universities New Zealand has welcomed the National Statement of Science Investment released by the Government today... this is a critical document as it sets out the Government’s ten-year strategic direction that will guide future investment in New Zealand’s science system. More>>


Scouring: Cavalier Merger Would Extract 'Monopoly Rents' - Godfrey Hirst

A merger of Cavalier Wool Holdings and New Zealand Wool Services International's two wool scouring operations would create a monopoly, says carpet maker Godfrey Hirst. The Commerce Commission on Friday released its second draft determination on the merger, maintaining its view that the public benefits would outweigh the loss of competition. More>>


Scoop Review Of Books: She Means Business

As Foreman says in her conclusion, this is a business book. It opens with a brief biographical section followed by a collection of interesting tips for entrepreneurs... More>>


Hourly Wage Gap Grows: Gender Pay Gap Still Fixed At Fourteen Percent

“The totally unchanged pay gap is a slap in the face for women, families and the economy,” says Coalition spokesperson, Angela McLeod. Even worse, Māori and Pacific women face an outrageous pay gap of 28% and 33% when compared with the pay packets of Pākehā men. More>>


Housing: English On Housing Affordability And The Economy

"Long lead times in the planning process tend to drive prices higher in the upswing of the housing cycle. And those lead times increase the risk that eight years later, when additional supply arrives, the demand shock that spurred the additional supply has reversed. The resulting excess supply could produce a price crash..." More>>


Get More From Scoop

Search Scoop  
Powered by Vodafone
NZ independent news