KiwiRail is reporting a net loss of $33.7 million for the six months to December 2019.
However, it marks an improvement on the $104.6m loss in the previous year and was boosted by government spending including an allocated $300m from the Provincial Growth Fund.
Its half-year revenue was up $4.8m year-on-year to $333.6m. Excluding the impact of fuel cost recoveries, its underlying revenues grew by $8.2m or 3% for the half-year period.
KiwiRail chief executive Greg Miller says it’s a solid performance despite a challenging business environment.
“We are pleased we have held the revenue line in a difficult environment that included an economic downturn in multiple markets, along with natural events that damaged the network.
“Despite these challenges, we saw our import/export business grow by 5% compared to the previous half-year,” Miller says.
KiwiRail’s operating surplus was $26.9m and saw the impact of softer freight volumes and passenger numbers and the unexpected eight-week line closure at Omoto due to slips.
“Looking ahead, we expect market challenges to continue into the second half of year. KiwiRail will be affected, as are other New Zealand transport, import and producer companies, by the effects of coronavirus,” Miller says.
“We’re making good progress, but we are still dealing with the results of many years of underinvestment that has limited our ability to continue to provide the services our customers need, and to realise the full potential and value of rail.
“This is a watershed year for KiwiRail, as we start the transformation of our business. The Government has made a huge commitment to rail, and the investment that is being made in our network and in our rolling stock will position us well to meet the current and future demand of our customers.
“We aim to keep a strong commercial focus for KiwiRail, while also focusing on the added benefits rail brings by reducing heavy commercial vehicle wear and tear on roads, sustaining freight transport that reduces emissions by 66% compared to road transport, and reducing congestion on roads,” Miller says.
Highlights for the half-year include:
- Regional rail investment through the Provincial Growth Fund (PGF) including $94.8m for maintenance and remedial work to the Northland line (the additional $109.7 million package was announced at the start of the second half-year).
- Launching the design for a new Palmerston North road-rail freight hub with $40m PGF funding.
- Kaiarahi ferry purchased in November and re-flagged in New Zealand.
- Appointment of naval architects and ship brokers to facilitate the design and supply of new ferries for interisland connectivity in New Zealand through $35m Budget funding.
- Launch of work on double tracking of the Hutt Valley line between Trentham and Upper Hutt, to increase capacity on the line.
- One of the biggest Christmas work blitzes in Wellington, making large strides towards completing a major upgrade of the metro network.
- Arrival of the first 450 wagons as part of the rolling stock replacement project.
- PGF funding announced for the revitalisation of the Hillside workshops with $20m to upgrade and create new facilities.
