By Phil Boeyen, ShareChat Business News Editor
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Thursday 2nd August 2001 |
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Sales revenue for the year ended June grew to $628.4 million compared with $594.4 million last year, with an operating surplus before unusual items and tax of $22 million against $50 million previously.
However direct costs of reorganising the transport operator cut deeply into the surplus, wiping off $21.3 million.
Tranz Rail says direct costs of reorganisation include redundancy costs associated with management changes, relocation of functions from Wellington to Auckland, and business reengineering. It also includes costs of reconfiguring the ferry fleet in December last year.
Despite the poor operating result tax benefits helped lift net profit after tax to a more creditable $5.5 million, although that is still 88.2% lower than the previous year.
Chief financial officer, Mark Bloomer, says the reported profit performance was expected and reflects significant costs of the change process.
Last year the company announced a strategic plan which included selling passenger rail services to concentrate on freight, and Mr Bloomer says good progress has been made on the plan although it is too early to see the financial benefit.
Total freight revenue grew 4% to $463.5 million and passenger revenue rose 13% to $143.9 million.
"Regrettably, the benefits of these higher revenues have been eroded by higher costs," says Mr Bloomer.
Operating costs, excluding reorganisation costs, jumped 11% to $583.2 million. The company also spent 37% or $18.6 million dollars more on fuel than it did last year due to higher fuel and traction electricity costs.
Operating profit for the twelve months was $23.9 million, but the company says excluding the impact of the direct costs of re-organisation, the figure was $45.2 million compared to $70.8 million last year.
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