Coal volumes significantly impacted by adverse weather conditions resulting in a 7 percent decline for Asciano in it's first quarter
May 3, 2011
Coal volumes significantly impacted by adverse weather conditions resulting in a 7 percent decline for Asciano in this year’s first quarter
In a statement to the ASX, the rail and port operator says track congestion in the Hunter Valley supply chain also continued to significantly restrict the amount of coal that could be hauled during the period.
“Coal availability after March 2011 is expected to improve from third quarter levels,” the company says.
Asciano’s
intermodal business also suffered with the East to West rail corridor closed for more than 10 days during the period as a result of track flooding in WA.
“This impacted forwarders, steel and express volumes,” the company says
“Despite track closures, express volumes were still in line with the corresponding prior year quarter, however steel volumes remained flat reflecting low levels of construction activity.
“The Queensland floods and cyclone Yasi resulted in the cancellation of a significant number of Pacific National Queensland services during the period.”
Patrick Ports reveals container volumes across three of the four ports were lower than the previous corresponding period.
“There was a decline in import volumes during the period reflecting lower retail spending which resulted in vessel consolidation and the cancellation of a number of services,” Asciano says.
“Volumes were impacted by the Queensland floods with vessels bypassing Brisbane and lower exports moving out of Queensland.
“Exports out of Fremantle were impacted by drought conditions in Western Australia.”
Asciano’s Auto Bulk and General business had the only good news, with vehicle storage days marginally up on the previous quarter and up significantly on the corresponding prior year quarter.
“This reflects a recovery of vehicle volumes following the strong sales in the previous year and improved market confidence,” the company says.
“Steel volumes increased on the corresponding prior year quarter reflecting stronger import and export volumes while bulk and general volumes were lower due to the impact of flood and drought conditions in Queensland and Western Australia.
“A significant uplift in bulk rail NTKs was driven by the strong export grain volumes in both NSW and Victoria.”
According to Asciano Managing Director and CEO, John Mullen the company expects general business conditions to slowly improve across all divisions in Quarter 4.
“Weather related impacts are expected to moderate in line with seasonal change, but the cumulative impacts to Asciano customers will result in a slower recovery as coal supplies remain significantly depleted,” Mullen says.
“Patrick’s prior period customer losses are now clear of equivalent historic comparisons and customer metrics continue to show positive momentum.
“The current industrial activity will continue into Quarter 4, pending a commercially sensible outcome.”
Mullen advises full year EBIT is expected to be in the range of $530 to $540m despite these one-off events.
“These estimates include the effects of the MUA’s industrial disruption to date, but any worsening or material prolongation of the disruption has not been quantified at this time.
“The March Quarter was a challenging period for most parts of the Asciano business,” Mullen adds.
“In addition, management’s decision to stand firm in the face of unrealistic demands being made by the MUA in pursuit of wage claims in the Ports Division will have an as yet unquantified impact on the company’s results.
“We hope to resolve this in as short a timeframe as possible.
“Despite these events, we remain pleased that the business is on track to show a healthy growth in both revenue and EBIT for the full year.”