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Costs profit Tranz Rail

(from New Zealand Herald, Business & Finance section, 29Jan97)

Tranz Rail has posted a $24.1 million aftertax profit for the December half-year, the first reporting period since it floated last June.

The result was $5.2 million higher than in the same period a year ago. Much of the improvement came from lower financing costs. Debt repayments after the June float cut the bill for interest and deferred financing cost amortisation from $17.5 million to $10.2 million.

Profit at the operating level was up by only $200,000, to $46.6 million. The company made $14.7 million in the December second quarter, following a $9.4 million profit for the three months to September.

Because Tranz Rail's prospectus had to comply with United States securities regulations, no profit forecasts were given. After-tax profit for the June 1996 year was $49.2 million.

The chairman, Ed Burkhardt, said the results had continued to improve while the New Zealand economy showed modest groutth. Revenue for the half-year lifted 1.5 per cent to $284.8 million, while operating costs increased by 2 per cent to $238.2 million.

Revenue from rail and maritime operations was up 3 per cent. The Tranz Link freight handling and transport services arm moved 5.6 million tonnes, up 12 per cent.

The Interisland Cook Strait ferry service boosted revenue by 7 per cent, and rail passenger revenue grew by 4 per cent.

On the cost side, labour expenses rose by $2.4 million, or 2 per cent, and contract transport costs lifted 6 per cent. Materials costs fell by 27 per cent.

The tax charge rose to $12.3. million from $10 million a year ago.