Despite a flat revenue year, KiwiRail says growth in some markets shows that rail is still relevant in the local transport sector.
KiwiRail says the 2013/14 financial year had been a challenging one, but it realised a 6% growth in the domestic freight market.
The propeller shaft failure on the Interislander ferry Aratere and the identification of asbestos contamination in the new DL locomotives, were two events that affected the company earnings and reputation this financial year says KiwiRail chairman John Spence.
Those issues with the Aratere saw the Interislander passenger revenue down by 9%.
KiwiRail recovered some of that loss with increased revenue of 2% from commercial vehicle freight on its ferries. Tranz Metro and KiwiRail Scenic Journeys operations both performed well.
Spence says that the annual results were disappointing considering the year had started well with the freight business on target to exceed its revenue and profit targets for the year.
“By the end of October we were up 4% on the same time in 2013,” he says.
“With a slowdown in export logging and dairy volumes, prices fell on the international market which meant a drop in our operating surplus of more than 28% from 2013 to $77.5m.”
KiwiRail chief executive officer Peter Reidy says the company has to operate and optimise the transport rail system to enable export, domestic and passenger patronage growth.
“With high fixed costs, maximising return on our investments means our rolling stock needs to be operating at full capacity with minimum disruption,” says Reidy.
“For the first time in 35 years we have invested in 40 new locomotives. One locomotive can move the same freight as 100 trucks. This investment in new stock enables us to better meet the demands of our customers.”
