State-owned railroad KiwiRail says full-year earnings will miss its target as higher freight volumes are offset by challenges in the rest of its businesses.
Earnings before interest, tax, depreciation and amortisation were expected to be between $105 million and $115 million in the year ending June 30, compared with the target of $139.5 million, the Wellington-based company said yesterday.
In the first half, sales rose 5.1 per cent to $349 million but operating expenses climbed 8.1 per cent to $305.5 million. Revenue generated operating earnings of $43.5 million but that was swallowed up by $155 million of depreciation and amortisation, tax, finance costs and foreign exchange losses.
The net result was a loss of $118 million in the six months ended December 31, a deterioration from the loss of $111.5 million a year earlier. Government grant income of $72.7 million trimmed the loss to $45.7 million, though grant income a year earlier was $202 million and led to a profit of $90.8 million.
Ebitda from freight and infrastructure rose $8.5 million, the company said. Total operating revenue from freight rose about 11 per cent to $221 million.
