Auckland rail operator Veolia almost doubles profit after new contract
The company's gross profit margin jumps to 10.7% from 7.7% a year earlier.
Veolia Transport Auckland, which runs the city's urban passenger trains, almost doubled its annual profit last year after it changed the way it does business.
Veolia, a unit of Paris-based Veolia Transdev, posted a profit of $1.99 million in the year ended December 31, up from $999,000 a year earlier, according to accounts filed with the Companies Office.
The company's gross profit margin jumped to 10.7 percent from 7.7 percent a year earlier.
Veolia provides the rail service under a contract with Auckland Transport, which receives subsidies from the New Zealand Transport Agency and Auckland Council.
In 2012, Veolia negotiated a contract extension with Auckland Transport from a management fee to a "risk and reward" agreement which incentivises performance and efficient management of the Auckland rail operation.
"We restructured the business and redeployed our workforce, achieving some great operational cost efficiencies with no redundancies in the process," Veolia managing director Terry Scott says in an emailed statement.
"Cost savings achieved in the 2012 year will be accounted for in the next year's budget and so will be passed on to ratepayers."
Veolia's revenue rose 7.9 percent to $92.5 million last year, while costs advanced 4.4 percent to $82.6 million, according to the company accounts.
The New Zealand unit paid its Australian parent a $785,000 management fee, down 1.9 percent from the year earlier.
Veolia's trains use infrastructure owned and managed by state-owned KiwiRail.
(BusinessDesk)
Tina Morrison
Wed, 11 Jul 2018
Wed, 11 Jul 2018
© All content copyright NBR. Do not reproduce in any form without permission, even if you have a paid subscription.
Auckland rail operator Veolia almost doubles profit after new contract
29620