Asciano still feels the sting from Toll experience

Asciano to write down more than $1bn due to financial impairment, as the effect of its demerger with Toll lingers

By Samantha Freestone | May 11, 2010

Asciano directors announced today they will write down the value of their assets by $1.1 billion, as the company still feels the effects of its experience with Toll.

The announcement follows a recommendation from the company’s audit and risk committee as part of the annual preparation for financial reporting.

Asciano will write down the value of its port assets by $960 million. This includes $760 million relating to goodwill in Patrick’s container ports division.

In a statement released this morning, $30 million in lost revenue from customer contracts relating the time of the Toll-Asciano demerger will be presented as an individual item in the company’s full-year accounts.

"If we took worst case scenario in our container port business, it was a business that was sitting on our balance books reflecting judgements Toll made at the time of the de-merger," Asciano Managing Director and Chief Executive Officer Mark Rowsthorn says.

"Part of the issue is that when the de-merger went ahead, we couldn’t allocate goodwill to the coal business."

The write-down is based on "long-term assumptions" such as a third stevedore operating in Australia.

Asciano will also write down $60 million due to the value of its rail-mounted gantries at Port Botany.

Despite the announcement, Rowsthorn says cash flows are up on a corporate level compared with the last time round.

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