KiwiRail has posted an operating surplus of $28.6 million for its half year result, $1.7m ahead of the same period last year.
Group chief executive Greg Miller says the HY21 result is positive considering the declines in most freight sectors and the impact of closed borders on the company’s tourism businesses.
“Unsurprisingly, with New Zealand’s border closed to international visitors, our biggest operational loss in the six months to the end of December was in our Scenic business. Our Scenic trains TranzAlpine, Coastal Pacific and Northern Explorer together recorded a 65 per cent fall in revenue (down $7.6m) compared with HY20.”
Miller says good business decisions at all levels had enabled the company to post a positive result, despite the difficult backdrop.
“During the lockdown early last year, we took the opportunity to reconfigure our train plan which is the immensely complex heart of any railway company. We made changes so that when business picked up again our operations could be delivered at a lower cost. These efficiencies contributed to a better result than we otherwise could have expected in the current environment.
“In the first quarter of FY21 – which included the second lockdown – we ran fewer trains but in the second quarter with freight congestion building on the back of international supply chain disruption, numbers increased,” Miller says.
Overall, in the half year to December 31, KiwiRail ran 8% fewer trains, although some were longer and fuller because of the new train plan.
Excluding the impact of fuel cost recoveries, overall revenue for HY21 was $4.8m ahead of the prior year, although the revenue mix has changed due to the impact of Covid.
Interislander performed strongly despite the closed border, with higher than expected revenue from commercial vehicles (up 6% or $1.7m) partially offsetting a fall of $2.2m (down 7% ) from lower passenger numbers.
Miller says KiwiRail is positioned well as consumers and businesses were increasingly interested in making lower-carbon choices for transport. “Carrying freight by rail produces 70 per cent fewer greenhouse gas emissions than carrying the equivalent freight by road, as well as reducing congestion on the roads,” he says.
“Just before Christmas 2020, we named world-renowned Hyundai Mipo Dockyard (HMD) based in Ulsan, South Korea, as our preferred shipyard for replacing our three aging Interislander ferries with two new purpose-built vessels. We also announced that the new ferries’ Wellington terminal would be built on a new site in Kaiwharawhara.
“We anticipate trading conditions to remain challenging for the remainder of FY21, though we will remain focussed on delivering capital projects and service delivery which are helping build a more resilient and flexible rail network for our customers and for New Zealand, and which will help improve our returns in the longer term,” Miller says.
