Rail underpins strong growth for UGL
UGL Limited has released its 2011/2012 Annual Report that shows the eleventh consecutive year of underlying earnings growth, with its Rail division making a significant contribution to overall revenues and which the company sees continuing into 2013.
New OSCAR set at UGL Broadmeadow. Image: Mark Carter
UGL Limited reported an underlying net profit after tax (NPAT) of $168.3 million for the full year ended 30 June 2012, a 2% increase on the previous year while operating revenue increased 5% to $4.8 billion with earnings before interest and tax (EBIT) of $247.0 million for the full year period.
UGL Managing Director and CEO, Richard Leupen, said, “UGL has delivered another solid result and the eleventh consecutive year of underlying profit growth, a reflection of our proven, diverse business model which continues to deliver a stability of earnings to our shareholders.
“Our Rail and Resources businesses have delivered stable results while our Infrastructure business was impacted by the growing skills and labour shortages across the sector. Following a strategic reorganisation, these businesses are now better aligned to respond to opportunities for expansion, both in existing and new markets.”
While revenue for Rail was slightly down on the prior year at $1.2 billion, EBIT performance was steady at $85.1 million reflecting an expansion in margin to 7.1%. The result reflects the ongoing strong demand for freight locomotives as well as steady performance on UGL’s core passenger maintenance contracts in New South Wales and Victoria.
During the year, UGL also successfully completed the delivery of the last Stage 3 passenger cars for the Outer Suburban Railcar (Oscar) Project to RailCorp both ahead of schedule and under budget.
Significantly, the Rail order book increased 28% to $3.6 billion as at 30 June 2012, reflecting the renewal of the $1.4 billion maintenance and logistics contract with RailCorp as well as a strong win rate in freight locomotives where UGL has grown market share.
The demand dynamics for freight locomotive supply and maintenance services from the Australian resources sector remains particularly strong. Of the $2.2 billion in weighted and qualified opportunities identified across both the freight and passenger sectors, UGL expects to participate in a significant proportion of these opportunities as they come to market.
“Our Rail business delivered a strong performance in 2012 and similar results are expected for the 2013 financial year. Growth in iron ore and coal export volumes remains strong despite weakening commodity prices,” Leupen said.
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