Asciano delivers strong earnings performance for 2013

 

News article: Asciano delivers strong earnings performance for 2013

We are extremely pleased to report that Asciano has delivered another strong earnings performance in the 2013 financial year, despite the challenging macroeconomic environment, both in Australia and in global markets.

  bevans Site Admin

Location: Melbourne, Australia
We are extremely pleased to report that Asciano has delivered another strong earnings performance in the 2013 financial year, despite the challenging macroeconomic environment, both in Australia and in global markets. Our performance reflects the benefits of new contracts, organic growth in some of our markets and the strength of our business activities across the Australian transport and logistics industry.

We have continued to pursue our strategic objective of becoming Australia’s leading provider of critical logistics services within essential infrastructure-based supply chains and have taken further steps to promote and embed our core values of Performance, Customer, Safety and People and Teamwork.
Asciano delivers strong earnings performance for 2013


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Pacific National Rail revenue up.  An impressive turnaround and lift from last years results.  Asciano have certainly turned the corner.  The shareholders are going to love this result.

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  JimYarin Chief Commissioner

Location: Adelaide, South Australia
Reading the annual report the following figures stand out.

Pacific National Coal had a big increase in revenue due to expanding operations in Queensland. (who said coal was dead?)
Pacific National Rail also had earnings growth. The annual report states:

The two components of our Rail business – Intermodal and Bulk Rail – each saw volatile market conditions through the course of 2013 that led to an overall increase in revenue of 2.8% to $1,360 million. This result was achieved on the back of a 6.4% increase in Bulk Rail Net Tonne Kilometres, offset by a 1.4% decline in Intermodal Net Tonne Kilometres.

Asciano
Grain revenue is contributing to growth.  There is talk of mineral traffic which i understand to be the Hamilton mineral sands traffic. So even with the loss of the rice traffic in Victoria PN's revenue for rail and bulk was up.

Our Bulk business experienced a strong increase in revenue of 8.3% during the year, underlined by a 10% increase in grain revenue despite a softer than expected start in the year. Minerals revenue was also stronger through new business gains, but this increase was fully offset by a reduction in specialised freight haulage and lower infrastructure revenues as a result of the Broken Hill sleeper program.
Asciano

There is still a lot more to do PN.  Focus on Mount Gambier to Portland or Mount Gambier to Port Adelaide for wood chips.

There is still a lot of grain here in SA which could go via rail.

Victoria still has a lot of opportunity on BG.

Having said that Asciano also state by way of guidance:

a strong outlook for a vibrant market Our Pacific National Rail business has laid strong foundations through the period which we expect will position us well for the future. The business will continue to benefit from an increase in market activity throughout Australia – albeit at a softer growth rate when compared to the recent period of activity. Additionally, we will see the full benefits of the continued provision of intermodal freight services through our new five year agreements with both Linfox and Star Track Express. Whilst grain volumes are expected to be lower for the year, we will see bulk commodity contracts with Iluka, Boral and Holcim ramp up through the next 18 months. Our business remains focused on our aim of maintaining our position as Australia’s leading provider of intermodal and bulk rail services. Our continued scrutiny of cost structures, productivity levels and superior customer service will help ensure we are well placed to continue delivering success for our stakeholders.
Asciano

PN are expecting Mineral Sands traffic to increase and for Grain to slow.
  JimYarin Chief Commissioner

Location: Adelaide, South Australia
Pacific National Coal Summary suggests still some strong growth in coal haulage to come.

PN Coal reported an increase in total revenue (net of access) of 22% over the pcp to $842.4m. Total revenue included the gain from the sale of land at Kooragang Island in Newcastle of $21.5m. The site was no longer required following the completion of the new maintenance and provisioning centre at Greta in the Hunter Valley. The proceeds from sale offsets to an extent the capital cost associated with the development of the Greta facility over the last two years. Operating revenue1 net of access grew 18.9% over the pcp to $820.9m, driven by a 15.5% increase in tonnes and 20.3% increase in NTKs. Tonnage hauled over the 12 month period versus contracted was approximately 82%.

Tonnage hauled in South Eastern Australia (“SEA”) increased 7.8% and NTKs hauled increased 12.3% over the period. The increase was driven by stronger growth in the northern SEA region offset by a decline in volumes in the southern SEA regions. The performance of the SEA business was impacted by a range of factors including:

• good organic growth in Hunter Valley coal chain volumes, in particular growth in volumes from the Gunnedah Basin region;
• volumes into Port Kembla were impacted by ongoing equipment and stockpile issues at Port Kembla Coal Terminal (“PKCT”);
• weaker demand for metallurgical coal exports from the Southern SEA region;
• closure of the Flinders Power Station for maintenance during the first quarter and in May;
• closure of Glencore’s Baal Bone mine due to end of life; and
• care and maintenance of Centennial Coal’s Airly mines. Tonnage hauled in Queensland increased 43.7% on the pcp and NTKs increased 35.7% on pcp. Following a relatively weak first quarter (versus contracted tonnage) in Queensland, volumes picked up in the second quarter, reflecting an improvement in export demand. The result was driven by a number of factors including:
• the full period impact of two new contracts that commenced on 1 January 2012, a 10.9mtpa contract with Anglo American and a 3.5mpt contract with Middlemount mine, a joint venture between Peabody Energy (Macarthur Coal) and Yancoal;
• the impact of a new 3mtpa contract that commenced on 1 July 2012 with Anglo American from its Foxleigh mine in Queensland;
• the impact of the commencement of the 4.2mtpa contract with BHP Mitsui Coal (“BMC”) on 1 January 2013; and
• lower tonnage hauled versus contracted due to the impact of slowing demand for metallurgical coal exports in particular in the first quarter and the expansion project impacts at Rio Tinto’s Kestral mine.

EBITDA increased 24.6% to $407.5m. EBITDA growth was impacted by:
• the impact of three major rail incidents in the 1H FY13, including in some cases customer penalties, estimated to have been $14.5m;
• EBITDA includes the profit on the sale of land at Kooragang Island of $21.5m. EBITDA growth excluding this increased 18% over the pcp to $386m; and
• the impact of two days of industrial action in the Hunter Valley with an estimated impact of $2m.
Asciano
  JimYarin Chief Commissioner

Location: Adelaide, South Australia
Looking at the closure of Baal Bone (perhaps someone from NSW can update us) the website for the mine states the following:

Baal Bone Colliery Description Baal Bone is located in the Western Coalfields of NSW, 32 km north of Lithgow and approximately 130 km from Sydney.
The mine is operated by Wallerawang Collieries Ltd, a company which is 95% owned by Oakbridge and 5% by Sumitomo Corporation. Oakbridge is 78% owned by Xstrata.

Brief history of the operation Baal Bone Colliery is an underground/open cut operation established in 1983 at the site of the old Ben Bullen opencut mine, which had been abandoned in 1952.

The colliery was developed to replace the diminishing reserves at Wallerawang Colliery to the south. In 2011, with the completion of longwall 31, mining ceased at Baal Bone Colliery.

From 2012 Baal Bone Colliery has been used as a training facility for Xstrata employees. Underground workers complete a twelve week training course including classroom tutorials, and equipment familiarisation. The objective of the training program is to provide employees with experience and skills in an underground mining environment.
Baal Bone

PN's report states their lack of earnings from this colliery affected their 2013 financial results.  But mining stopped in 2011 ??
  donttellmywife Chief Commissioner

Location: Antofagasta
PN's report states their lack of earnings from this colliery affected their 2013 financial results.  But mining stopped in 2011 ??
JimYarin
Cessation of processing and railing may lag cessation of mining somewhat, depending on surface run of mine and product stock levels (though typically surface ROM stocks for coal mines are not large).  More importantly, financial year and calendar year are not [necessarily] the same thing.
  bevans Site Admin

Location: Melbourne, Australia
Asciano Stock price up 2% in today's trading. Renewed market confidence.

Regards
Brian
  bingley hall Minister for Railways

Location: Last train to Skaville
Pacific National Coal Summary suggests still some strong growth in coal haulage to come.
JimYarin
It was never otherwise.
  JimYarin Chief Commissioner

Location: Adelaide, South Australia
Some months ago i recall reading almost half of all the coal exports from newcastle were being sold at a reduced or loss price.  i took this to mean, perhaps incorrectly, coal demand had dropped and therefore had placed downward pressure on coal prices?
  bingley hall Minister for Railways

Location: Last train to Skaville
Some months ago i recall reading almost half of all the coal exports from newcastle were being sold at a reduced or loss price.  i took this to mean, perhaps incorrectly, coal demand had dropped and therefore had placed downward pressure on coal prices?
JimYarin
Similarly just over 12 months ago the iron ore price took a huge hit and we were all told it was the end of the world. It bounced back within in months and iron ore exports are at record levels.

The coal price may also have taken a hit, but in general* continued to be exported at record levels - a simple check of the Hunter Valley export figures would show that.

But Tony Abbott and his mates in the mining industry told us the mining tax was the end of the world so all the negative nellies in the media on an Railpage joined along in another chorus of "we're all doomed" - without bothering to check the facts.

*coking coal has taken a bit of a hit, but this has been more than matched by increases in thermal coal.
  oldghan Station Master

The bad news having just completed a reading of the annual report is container lifts at their patricks ports are down.  This could be due to less exports or less imports.

The logistics business also contracted over the same period.

Bulk saved the day.
  oldghan Station Master

Adviser blasts Aurizon over payAurizon faces a backlash from shareholders over executive pay at its annual meeting next month after an influential adviser urged institutional investors to vote against the rail company's remuneration report.
ISS has also advised clients - some of whom are Aurizon's largest shareholders - to abstain from voting on the granting of performance rights to chief executive Lance Hockridge. The call from ISS for a vote against the executive pay card comes after Aurizon attempted last month to allay concerns by freezing management's base pay in the new financial year and making changes to short-term bonuses.
The proxy adviser has urged a no-vote because it believes the board has not raised the hurdles for executives' long-term bonuses after Aurizon embarked on a $1.1 billion share buyback last October. ISS said the buyback had a ''materially positive impact'' on the long-term incentives for Aurizon executives, resulting in ''outcomes that did not truly reflect company performance''.
Mr Hockridge received a 34 per cent rise in his total pay package last financial year to $6.1 million, making him one of the country's highest-paid executives. His pay totalled $4.57 million a year earlier.

The other main advisers to large investors, CGI Glass Lewis and Ownership Matters, are yet to release their reports on the listed rail company once known as QR National. The Australian Shareholders Association, the voice for retail investors, is yet to cast judgment but warned Aurizon was ''flashing red on our radar'' given its history.
''We start with a very negative posture on Aurizon, which has probably been the worst in the market over the last two years for changing the goalposts [for executive bonuses],'' spokesman Stephen Mayne said.
But Aurizon said the targets for long-term bonuses was challenging ''given the tough business environment'', and it disputed the proxy adviser's conclusion about the impact of the share buyback on executive bonuses.

Read more: [color=#003399]http://www.smh.com.au/business/adviser-blasts-aurizon-over-pay-20131016-2vmy0.html#ixzz2i3gQRVRQ[/color]
  bingley hall Minister for Railways

Location: Last train to Skaville
Adviser blasts Aurizon over payAurizon faces a backlash from shareholders

Read more: [color=#003399]http://www.smh.com.au/business/adviser-blasts-aurizon-over-pay-20131016-2vmy0.html#ixzz2i3gQRVRQ[/color]
oldghan

Aurizon, Asciano.....don't even sound same.



Simples!

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