Revenue up 11 percent as parent flags new structure and some recoveries from natural disaster costs
August 29, 2011
QR National has gained a significant rebound in its general freight, its annual results released today show.
The rail operator that also has a significant trucking presence reported a group net profit of $349.5 million for the last financial year, up from a loss of $222 million the pervious year.
Revenues rose to about $3.3 billion, an
11 percent rise from around $3 billion the year before.
Despite the extreme weather conditions across the country over the past 12 months, QR National Freight revenue of $1.3 billion was up 11 percent.
Underlying earnings before interest and tax rose $126.5 million to $30.6 million, while capital expenditure more than doubled to $197.8 million from $89 million.
During the year, the group sold Isa Freight Services for $6.1 million and Pittman Transport for $6.2 million to CRT Group.
CRT is part of QR National’s wholly owned subsidiary, Logistics Australasia, which includes Golden Bros Group and NHK.
Bought in 2005, CRT has operated under the QR National banner since July 1.
QR National gained a five-fold increase from its Transport Service Contracts with the Queensland Government for regional freight and livestock transport, to $148.3 million from $27.5 million in 2010.
They are part of a five-year deal signed a year ago, which will see the group gain $148.1 million in a year’s time and $75.1 million to the end of calendar 2012.
Between the end of calendar 2012 and the contract’s expiry, it will gain $90 million for general freight and $13 million for livestock transport.
Flood and cyclone impacts cost QR National $185 million.
In its annual results report, the group says it will be able to recover $65 million of that in the coming years.
“The floods impacted heavily on Queensland coal production and many of our customers have experienced slower than expected recovery of coal supplies,” Managing Director and CEO Lance Hockridge says.
“The wet weather contributed to a 37 million tonne reduction in coal haulage volumes compared to expectations.”
However, Hockridge says QR National gained momentum in its transformation program with a focus on improved revenue quality, cost management and operational efficiencies, enabling an offset of the impact of the reduced coal haulage.
The company’s cost management efforts in April resulted in the voluntary redundancy of 660 employees.
Hockridge says QR National is now looking to advance a proposal to restructure the business along functional lines, to achieve a more customer-focused cost efficient business.
“The changes involve a move from a business-unit structure towards one structured on functional roles, much like the high-performing class one railroads in North America,” Hockridge says.
“Implementation of the high-level functional structure will be followed by further redesign and restructuring within the business subject to consultation with employees and employee representatives.
“In combination with other work, this delivers the required commercial and customer-focused behaviours in the company and support the acceleration of transformation.”
