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Asciano predicts jump in earnings

Rail and ports operator Asciano says it expects to report an increase in full year earnings despite a difficult third quarter that saw severe weather significantly deplete supplies of coal for its customers.

The company expects full year earnings before interest and tax (EBIT) to be in the range of $530m to $540m – a reported 22% increase on last year’s results of $439.56m.

Coal volumes were significantly impacted by adverse weather conditions in both Queensland and New South Wales, with Pacific National reporting the movement of 4.126bn net tonne kilometres (NTK) of coal in the 2011 third quarter – a 7% drop compared to 4.418bn NTK for the same period in 2010.

Track congestion in the Hunter Valley supply chains also continued to restrict the amount of coal hauled by PN.

Asciano’s PN Intermodal saw a 6% drop to 4.981bn NTK compared to 5.289bn NTK in the same quarter last year. On the ports front, Patrick’s container volumes were down by 8% to 400,000 tonnes from 435,000 tonnes in the March quarter 2010.

Asciano chief executive John Mullen said the company was on track to show a healthy growth in both revenue and EBIT despite a challenging quarter.

“Many of the events which occurred during the quarter were both out of the ordinary and unforeseen. These events have made this a very difficult period for Asciano,” he said.

Stalled negotiations between Patrick and the Maritime Union of Australia (MUA) over new contract terms for waterfront workers would also impact Asciano’s results, Mullen said.

“… Management’s decision to stand firm in the face of the unrealistic demands being made by the MUA in pursuit of wage claims in the ports division well in excess of industry norms will have an as yet unqualified impact on the company’s results …” he said, adding that the company hoped to resolve this in as short a timeframe as possible.