KiwiRail 1Q revenue ahead of budget, focus still on containing costs
BUSINESSDESK: KiwiRail, which runs the nation's railway network, is tracking ahead of expectations after the first three months of the financial year, but is still conscious of the need to keep a lid on costs.
The state-owned enterprise's group revenue was ahead of budget in the first-quarter on increases in forestry, import/export and domestic freight volumes, chief executive Jim Quinn told a public meeting in Wellington.
The rail operator had also reported increases in freight on the interisland ferries, and its passenger services were in line with expectations.
"The outlook for this financial year is promising as group revenue is slightly ahead of budget," chairman John Spencer says.
"We have to remain focused on cost containment and a better way of operating to ensure we meet our targets and drive as much of the revenue growth as possible to the bottom line."
Earlier this month KiwiRail mothballed the Napier-Gisborne line, saying the cost of reopening the track was not worth it.
The rail operator is on a drive to strip out $200 million in annual spending if it is to meet forecast earnings of $64.6 million by 2013. It missed its statement of corporate intent revenue target of $737 million, as it posted annual sales of $71.58 million in the latest financial year.
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Comments and questions2
Is the annual sales figure slightly out? The decimal place appears to be out...
One notes the intended demise of the Napier - Gisborne Line. This is in spite of the successful turnaround of the line in the past 12 months by private enterprise.
To me, the mothballing represents the absolute antithesis of what the incumbent government should be standing for, in terms of support for private enterprise, especially as only a pitiful amount would be to re-open the storm damaged line. Especially when it seems the main problem is that KiwiRail are unable to supply the Rolling Stock to run on the line (As widely reported).. This in spite of new Locomotives and Rolling Stock!.
Several government seats that could be lost over it, as it appears that the government has managed to alienate the entire East Coast .
I believe that this issue will take Prime Ministerial intervention and Mr Key should step in and not tow the line that it's a "Done Deal".
I believe Messrs Joyce and English to have tunnel vision in terms of transport. While they have been effective in some areas, perhaps it's time that they turned their talents into areas such as health etc