1 Mar 2013

KiwiRail downgrades full year operating revenue

8:03 am on 1 March 2013

KiwiRail has downgraded its full year operating revenue due to a flat economy and weather damaged lines.

The state-owned rail operator is expecting to make between $104 million and $110 million in the June year, compared with an earlier estimate of $119 million.

That comes after it reported a wider loss of $75.9 million in the six months to December due to writing down the value of its assets.

KiwiRail has been closing operations like its Hillside foundry in Dunedin, mothballing lines and axing jobs to reduce costs, and concentrate on building its main freight business.

KiwiRail's operating surplus rose 8% to $47 million. Chief executive Jim Quinn said this was boosted by its import-export freight arm which offset falls in coal and lower-than-forecast milk volumes.

Mr Quinn said KiwiRail is being gradually put on stronger, more sustainable footing.

He said the core business opportunities are in the network and the firm is reaching into new areas, such as in recent weeks connecting to the new Fonterra milk processing site at Darfield.

KiwiRail is connected to all but one of the country's ports, and Mr Quinn said they have been working with the company much more actively and using rail to get products to port.

He says now it's about KiwiRail making it easy for its customers to use the service, being as transparent as possible and having the key things such as reliability in place.

Revenue rose 4% to $363 million.