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Asciano pushes PN Coal spending to 2014

<span class="" id="parent-fieldname-description"> Pacific National Coal owner Asciano has announced spending cuts worth up to $225 million, citing “tougher economic conditions” as the reason for new capital constraints. </span> <p>Some planned redundancies across the business are also set to be pushed forward to the fourth quarter of 2012-13 (April-June 2013).</p><p>Company-wide spending cuts would see a decline in growth expenditure in PN Coal, with some planned spending pushed into the next financial year, Asciano chief executive John Mullen told the Macquarie Australia Conference last Thursday.</p><p>This is despite a 27.2% rise in net tonne kilometres (NTKs) in the third quarter of 2012-13 for PN Coal – from 4.7 trillion NTKs between January and March last year to just under 6 trillion NTKs in the same period this year.</p><p>The overall NTK figure was buoyed by strong contract growth in PN Coal’s Queensland (NTKs up 36.7%) operations, and higher activity levels with contracted mines in south eastern Australia (NTKs up 21.8%).</p><p>But south eastern Australia growth was impacted by system constraints in the upper Hunter Valley, and lower export demand from the region, Mullen explained.</p><p>$2-$3 million of strike action costs as a result of the Hunter Valley Rail Enterprise Agreement dispute earlier this year will also impact the year’s result.</p><p>PN Rail, which handles Pacific National’s non-coal operations, saw a 3.4% drop in its intermodal NTKs, for which Mullen cited soft volumes across most products, “reflecting current market conditions.”</p><p>Following the spending cuts scheduled for the current financial year, Asciano will also reduce its 2013-14 spending by around $100 million – although that figure could grow.</p><p>“If soft economic conditions continue into FY14, management has further flexibility to re-phase capital expenditure to more appropriately align with top line growth,” Mullen said.</p>