Fuel costs knock Tranz Rail first quarter

However the company says the latest figures include an abnormal provision for organisation change of $16.5 million. Excluding this abnormal charge, there was a net profit for the first quarter of $100,000 for the three months to the end of September.

TRH says the first quarter has reflected a continuation of two negative trends that developed in the second half of the last financial year.

Firstly, fuel costs have continued to rise to extraordinary levels and are now nearly twice those a year ago. While freight rates and passenger fares were increased for the first time in many years to counter this, it has not been adequate to keep up with the rising costs.

Secondly, the domestic economy continues to be slow and volumes carried are down against the same time last year when record levels were being experienced.

Tranz Rail says excluding the impact of abnormal organisation change costs, operating costs increased by $5.8 million, mainly due to higher fuel prices.

Total revenue for the quarter was $143.2 million, up $1.6 million on last year, but freight revenue fell slightly to $109.3 million. In contrast the company's passenger revenues rose 4.7% to $26.5 million thanks to an increase in Tranz Metro revenues.

Last month Tranz Rail announced plans to sell non-core assets, including passenger rail services, to concentrate on its interisland ferries and rail freight business.

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