Troubled rail operator Tranz Rail today posted a first-half profit of $1.9 million.
The net result after tax, for the six months to December 31, is down steeply on the $23 million profit recorded for the same period a year earlier.
Shares in Tranz Rail last traded down 4c at $1.32.
The shares
have lost nearly three quarters of their value in the past year as the company has battled problems with debt financing and heat-related stoppages on its commuter networks.
They hit a low of 92c in December, compared with a year high of $4.30.
Last year's result was boosted by the sale of assets including the Auckland rail corridor and the Tranz Scenic long distance passenger business.
Today's result was also hit by costs associated with refinancing of Tranz Rail's debt, offset by a $5.6 million unrealised foreign exchange gain on the lease of the Interisland ferry Aratere.
Total operating revenue for the period declined to $302 million from $367 million a year earlier.
Managing director Michael Beard said that the company's attention during the period was focused on the completion of a rights issue, the finalisation of negotiations surrounding the Aratere lease and the re-negotiation of the company's banking facilities through to June 2004.
He described the result as pleasing, given the uncertainty faced during the period, and said the company was now beginning to show the benefits of a switch in focus from a full service network to a freight operator.
"Having resolved issues around the company's financing, the way is now clear for the company to focus on the important operational issues necessary to meet our targets for the 2003 financial year and beyond," he said.
Tranz Rail said in November that it was heading towards a year end operating profit of more than $50 million.
Achieving Tranz Rail's forecast results would not be without challenges, however, Mr Beard said.
Key parts of the company's restructuring plan still needed to be completed including:
- sale of Wellington Metro;
- finalisation of lease negotiations with New Zealand Railways Corporation;
- negotiations with the Crown on Tranz Rail's place in the Government's land transport policy;
- analysis of Clifford Bay; and
- sale of surplus assets.
"On the operational side, control of costs, mitigating the effects of competition, and maintaining service integrity will be the key focus to producing satisfactory operating profits in line with forecasts," Mr Beard said.
Tranz Rail's share price has staged a comeback in the last week on reports the Government may look to buy back Tranz Rail's track network.
Tranz Rail has said talks with the Government are still at very preliminary stages.
- NZPA
