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.

(BusinessDesk)


© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Power Outages, Roads Close: Easter Storm Moving Down Country

The NZ Transport Agency says storm conditions at the start of the Easter break are making driving hazardous in Auckland and Northland and it advises people extreme care is needed on the regions’ state highways and roads... More>>

ALSO:

Houses (& Tobacco) Lead Inflation: CPI Up 0.3% In March Quarter

The consumers price index (CPI) rose 0.3 percent in the March 2014 quarter, Statistics New Zealand said today. Higher tobacco and housing prices were partly countered by seasonally cheaper international air fares, vegetables, and package holidays. More>>

ALSO:

Notoriously Reliable Predictions: Budget To Show Rise In Full-Time Income To 2018: English

This year’s Budget will forecast wage increases through to 2018 amounting to a $10,500 a year increase in average full time earnings over six years to $62,200 a year, says Finance Minister Bill English in a speech urging voters not to “put all of this at risk” by changing the government. More>>

ALSO:

Prices Up, Volume Down: March NZ House Sales Drop 10% As Loan Curbs Bite

New Zealand house sales dropped 10 percent in March from a year earlier as the Reserve Bank’s restrictions on low-equity mortgages continue to weigh on sales of cheaper property. More>>

ALSO:

Scoop Business: Chorus To Appeal Copper Pricing Judgment

Chorus will appeal a High Court ruling upholding the Commerce Commission’s determination setting the regulated prices on the telecommunications network operator’s copper lines. More>>

ALSO:

Earlier:

Cars: Precautionary Recalls Announced For Toyota Vehicles

Toyota advises that a number of its New Zealand vehicles are affected by a series of precautionary global recalls. Toyota New Zealand General Manager Customer Services Spencer Morris stressed that the recalls are precautionary. More>>

ALSO:

'Gardening Club': Air Freight Cartel Nets Almost $12 Million In Penalties

The High Court in Auckland has today ordered Swiss company Kuehne + Nagel International AG to pay a penalty of $3.1 million plus costs for breaches of the Commerce Act. Kuehne + Nagel’s penalty brings the total penalties ordered in this case to $11.95 million ... More>>

ALSO:

Crown Accounts: Revenue Below Projections

Core Crown tax revenue has increased by $1.9 billion (or 5.0%) compared to the same time last year. However this was $1.1 billion less than expected and is reflected across most tax types, continuing the pattern of recent months. More>>

ALSO:

Get More From Scoop

 
 
Computer Power Plus
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news