Passenger numbers on the Overlander were up but margins in rail and on the Interislander were down. Photo / Greg Bowker
Listed rail, road and ferry operator Toll NZ is blaming squeezed margins for a 61 per cent fall in profits despite a rise in revenue.
Net profit for the six months ending December 31 was $9.1 million, down from $23.2 million the previous year, with operating profit down
from $33.4 million to $24.2 million.
Toll said the fall in operating profit was mainly due to lower margins in Toll Rail and the Interislander.
Revenue grew to $366.5 million "with continued strength across the business, particularly in coal, domestic distribution, import-export and rail passenger".
"While the company's performance has been behind the same period last year, the second half of the 2007 financial year has started well and the company remains confident of a stronger second half of the year," Toll said.
Capital expenditure of $24 million in the locomotive and rail wagon fleet represented a significant portion of the half-year's operating cash flow.
The company said it did "not expect to be in a position to pay dividends in the foreseeable future".
A long-term deal had been reached with Greater Wellington Regional Council to provide passenger rail services, the Overlander had been successfully re-launched with strong passenger numbers and investment had continued into the coal route, with a trial of seven locomotives hauling 45 wagons through Otira Gorge, it said.
Shares closed down 5c yesterday at $2.70.
