Toll NZ, formerly Tranz Rail, is making money but says there is little chance of a dividend payout soon.
All eyes are now on its Australian parent, Toll Holdings, which marked its annual profit announcement yesterday by launching a A$4.6 billion ($5 billion) takeover bid for rival and sometime partner
Patrick Corp.
If successful, the takeover would create one of the world's biggest transport groups.
On the smaller, local scene, Toll NZ said a new contract with state-owned coal company Solid Energy and another with Fonterra helped lift revenues 7.5 per cent for the year, with operating profits up from $35.7 million to $59.5 million.
Toll Holdings has stalled in its attempt to wrest complete control of the local rail operator, with US investor Third Avenue now owning a little more than 10 per cent, blocking any attempt by Toll Australia to cross the 90 per cent threshold needed to compulsorily acquire all remaining shares.
Toll NZ has said it would spend more than the $100 million over five years on rail - as part of the deal to sell the track back to the Government. Under that deal, Wellington would invest $200 million in the network.
While progress had been made on improving company culture and focus on customers, margins and return on capital remained "lower than those required to maintain a sustainable level of capital expenditure".
"Trading this financial year is in line with expectations. Rail revenues in the latter part of the 2004-2005 financial year and early part of 2005-2006 were impacted by industrial action at Solid Energy which has since been resolved and trading is back to pre-industrial action levels."
Toll's $355.6 million after-tax loss last year was due mostly to $344.8 million of writedowns prompted by its sale of the tracks to the Government.
