KEY POINTS:
Toll NZ, operator of the largest rail, road and ferry business in the country, said it is being affected by a slowing economy.
The company issued a trading update today and again expressed frustration about negotiations with the Government on access fees to the state-owned rail network, which
it says are holding up new investment.
"Trading has been impacted by the slowdown in the New Zealand domestic economy combined with persistently high exchange rates affecting export levels, and lower margins particularly in the Interislander and Toll Rail businesses," the company said in a statement to the stock exchange.
Underlying earnings before interest and tax to December 31 2006 were ahead of budget, but would be lower than the previous corresponding period.
The company expects the second half result would be improved by a range of initiatives being implemented. It didn't go into details.
Toll NZ and the government track-owning entity Ontrack have been in dispute about access fees for this year and an independent arbitrator, Bill Wilson QC, has been called in.
Separate talks have continued between Toll and the Government on long term access arrangements.
Toll said today that the discussions with the Crown on a long term sustainable access regime have generally been positive.
But "Toll NZ is still concerned that the Crown appears to be unwilling to recognise the inequality of the funding support between road and rail and the need to adopt a more commercial approach to track access management.
"Toll NZ stands ready to implement a major rail fleet re-equipment programme once viable long term track access arrangements are established."
- NZPA understands that Mr Wilson has produced a draft report but that there is unlikely to be any announcement of a new long term access regime until that report is finalised.
Toll NZ is also getting a new chairman as it current chairman Mark Rowsthorn is moving to head an infrastructure business in Australia being spun out of the Toll Holdings Group parent.
Toll NZ stays under the umbrella of the Toll Holdings Group parent.
Toll Owens, the New Zealand port and stevedoring business owned by Toll and Port of Tauranga, will be owned by Infrastructure Co, headed by Mr Rowsthorn. It is the biggest handler of logs in New Zealand.
All the other New Zealand businesses, as well Toll Australia, Toll Asia and the investment in Virgin Blue will continue with Toll Holdings headed by Paul Little.
Toll NZ's parent is now a major shareholder in the airline Virgin Blue and it has not commented on what implementations that investment has for New Zealand.
Toll NZ said it and Toll Owens have co-operated effectively in the past, including the use of port and rail operations to deliver imported coal for the Huntly Power Station. The same level of co-operation would prevail following the restructure, Toll NZ said.
Australian John Ludeke has been appointed to the Toll NZ board and will take over from Mr Rowsthorn when the Toll restructure in Australia goes through.
- NZPA
