Port and rail operator, Asciano, has posted a higher full year profit that bucks a downward trend in the Australian coal industry.
Many in the nation’s coal industry are looking to balance the books at a time when the coal market faces difficult market conditions. The Australian coal industry is suffering from low prices for its coal, as well as rising costs of domestic production. State royalties received from the coal industry were AU$ 1.305 billion, down from a forecasted AU$ 1.878 billion.
However, Asciano benefited from the signing of new contracts, as net profit rose 41% to US$ 308.2 million.
Coal haulage contracts
John Mullen, CEO and managing director of Asciano, said the company was “pleased with this result, given the challenging external environment over the last 12 months. The results reflects positive returns on the significant capital investment programme over the last three years in Pacific National (PN) Coal, and the benefits of refocused activities on Bulk Ports.”
“PN Coal reported a 15.5% growth in tonnes transported,” Mullen said.
Thanks to new contracts in Queensland and growth in volume hauled by selected customers in the Hunter Valley, revenue for PN Coal increased 22%. Capital expenditure also decreased by 65.7% compared to FY12.
The year also saw the completion of new provisioning and maintenance facilities at Greta and Nebo, as well as investment in rolling stock from companies including BHP Mitsui Coal and Anglo American.
Work in progress costs decline 68.8% as the provisioning and maintenance facilities at Nebo and Greta came online.
Outlook for rail lines and terminals
Mullen said that, “Trading conditions in FY13 were extremely challenging for both Pacific National (PN) Rail and Terminals & Logistics. A soft Q1 flowed into a reasonable beginning to Q2 peak season; however, both Intermodal and Container Port volumes succumbed to the general malaise in the domestic economy, which accelerated through Q3. PN Rail volumes in particular remain weak going into the financial year.”
Investment in rolling stock for PN Rail increased 23% over the course of FY13.
Asciano said it would increase capital expenditure at its coal terminals, as it invests in new cranes and other equipment across four terminals and the redevelopment of Port Botany.
In June, Asciano lowered its expectations for market growth in container volumes on the country’s wharves to 1 to 2%/year from about 4 to 5%/year.
Asciano’s Patrick stevedoring operations and DP World face a growing threat from Hutchison Ports, which has begun operations in Brisbane and will open another terminal in Sydney next year.
Asciano has been preparing for the arrival of Hutchison with plans to replicate its automated terminal in Brisbane at its operations at Port Botany in Sydney. The company has already laid off 270 of its 511 employees at Port Botany, as it switches from manned to automated straddles, which shift containers around the port terminal.
Adapted from press release by Sam Dodson
Read the article online at: https://www.worldcoal.com/coal/22082013/rail_operations_buck_downward_trend_in_australian_coal_market_328/