Toll NZ promises more shake-ups but no dividends

Toll NZ has recorded an after tax loss of NZ$335.6m for the year to June 2004. The loss, which compares with the previous year loss of NZ$2.6m, is largely due to "unusual items" of NZ$344.8m, including the return of the rail network to the New Zealand Government, and "a detailed review of certain asset valuations" and the resultant tax implications, Toll NZ stated. Toll NZ chairman Mark Rowsthorn said the company would not be paying a dividend this year. "The directors do not expect the company to be in a position to pay dividends in the foreseeable future," Mr Rowsthorn said. Underlying trade was "generally in line with plan", although severe flooding in the North Island during February 2004 had a significant impact on trade. The company had pre-tax operating earnings of NZ$35.7m (down from NZ$40m the previous year) and operating revenue of NZ$631.1m (an increase 3.5% on 2002&#4703). Mr Rowsthorn said that since Toll Holdings had taken over the company &#8211 formerly Tranz Rail Holdings &#8211 in October 2003 it had begun restructuring the company operations. A review of vessel configuration at the Interisland Line has started and the vessel Arahura has returned to service following refurbishment &#8211 all in the face of intense competition, he said. "Following continuation of past operational efficiency issues associated with the vessel Aratere , a detailed review is underway to ensure our vessel fleet has the best possible configuration and operating processes to meet our customers needs," Mr Rowsthorn said. On the land side, Toll NZ reacquired the outstanding 50% share in its Tranz Scenic passenger rail operation and has also started restructuring this business, he said. Toll NZ also disposed of its 27% interest in the non-core Australian Transport Network &#8211 now owned by Toll Holdings’s 50%-owned Australian rail operation Pacific National. The company also completed the transaction for returning the rail network to government ownership &#8211 for the nominal fee of NZ$1. Progress with track maintenance and capital expenditure priorities under the newly formed New Zealand Railways Corporation is "generally satisfactory", he said. "The company is confident that we have established a sound framework from which rail can grow its share of the country’s freight task and greatly improve New Zealand’s transport capacity and efficiency," Mr Rowsthorn said. Trading since June 2004 was "in line with expectations" and restructuring would continue. However Toll NZ warned that should fuel prices remain near record levels it could affect growth in the Asian region and that might affect the New Zealand economy. The company has established a customer surcharge to minimise the impact of rising fuel costs.

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