Tranz Rail on profit track

By Yoke Har Lee

Tranz Rail's first quarter net profit more than doubled from the same period last year to $5.5 million, signalling a local economy in repair mode.

"There is no indication that what we are seeing in the first quarter is now going flat. It has remained solid," Mark Bloomer, chief financial officer said Analysts were, however, hesitant to paint too rosy a picture for the country's sole rail company.

They said that hinged on how sustainable the overall economic recovery was. Warren Doak, transport analyst at US investment house Merrill Lynch, said: "Looking at topline numbers, there is good growth at the freight level. This has been underpinned by good volume growth."

Tranz Rail's profit was in line with Merrill Lynch's forecast profit of $5.4 million.

Earnings per share for Tranz Rail were 4c against 2c seen in the previous quarter. Revenue rose to $141.6 million from $129.3 million. Total operating costs rose 8.1 per cent to $131.6 million.

Total freight revenue rose 13.8 per cent to $111.6 million.