KiwiRail has posted a $15.3 million operating surplus for the six months to December, 39% ahead of the previous year.
Chairman Trevor Janes says it would have been a $40 million operating surplus if not for ongoing challenges posed by the Kaikoura earthquake.
“It is a credit to the 3400 people of KiwiRail that this result betters the December 2016 half year and that the organisation is on target to meet its commitment to Government for the third year running,” Janes says.
“The underlying operating surplus of $40 million is a significant improvement on the prior HY result of $23 million.”
The result shows a 16% growth in intermodal ports revenue, and an 8% increase in forestry revenue as New Zealand’s ‘wall of wood’ comes on-stream.
However, there were several issues to deal with, particularly in the South Island, he says.
“It has been a messy six months, particularly in the South Island, where weather disrupted the recovery we had worked hard to achieve by reopening the earthquake-affected Main North Line months ahead of schedule,” says Janes.
“An ageing locomotive fleet in the South Island – which ranges in age from 32 years old to 57 years due to a legacy of past underinvestment – also caused issues for customers when a significant and unexpected overhaul programme was required to keep locomotives running.”
Janes says both issues created uncertainty of service for domestic customers and the limited overnight services on the MNL.
“While the previous Government committed to funding any insurance shortfall of the rail rebuild, KiwiRail has had to absorb the on-going revenue impact, including restricted freight volumes.”
