A NATIONAL freight downturn in a soft domestic economy, and a series of one-off events, contributed to a fall in KiwiRail’s bottom line in the half year to 31 December 2024 according to results issued late last week.
However, good progress was made in delivering on the company’s transformation plan and investments which together are positioning KiwiRail for future growth, the company said.
KiwiRail recorded an operating surplus of NZ$25.8 million for the half year, $14.7m behind the same period last year. On top of the challenging commercial environment, one-off impacts included losing freight volume as a result of the closure of Winstone Pulp International (WPI), the Tawhai tunnel collapse, a delayed start to re-opening the North Auckland Line which was damaged by Cyclone Gabrielle and redundancies as the company better aligned itself to the markets it serves.
“As a key part of New Zealand’s supply chain, KiwiRail quickly feels the impact of any economic downturn,” acting chair Rob Jager said.
“Overall, rail freight net tonne kilometres were down 7% over the half year, consistent with the general freight market reduction of 7-10%. Normalising for one-off events, KiwiRail’s freight volume was down 2-3%.
“However, we are working hard internally and with customers to improve our service levels and to ensure that when confidence returns to the economy, we are in a position to attract more freight to rail. The reinstatement of the North Auckland Line after Cyclone Gabrielle and Fonterra’s return to rail, the steady long-term demand outlook for dairy and forestry, and the reinstatement of Tawhai tunnel and resumption of the coal programme are all positive.”
Chief executive Peter Reidy said transformation initiatives were happening all across the company and saved $20m in the six months to 31 December: “We are committed to maintaining the momentum and achieving ongoing savings.
“It is pleasing to see Interislander building back to strong volumes by lifting its reliability, with ships operating at almost 100 per cent reliability (excluding disruptions caused by weather) since the return of Kaitaki from deep maintenance in October. December passenger numbers in excess of 90,000 reflect strong private vehicle volume share during HY25.
“In December, we carried around 33,000 vehicles which was near our all-time high for this period. Aratere is scheduled to go to dry dock this year, continuing the enhanced maintenance programme to which KiwiRail is committed for the Interislander fleet.
“Moving a tonne of freight by rail on average produces around 70 per cent fewer greenhouse gas emissions than moving it by truck. In addition to rail’s carbon advantage, across KiwiRail we are improving our environmental sustainability through a variety of measures including reducing fuel burn,” Mr Reidy said.
In the six months to 31 December, rail freight volumes of 1.6 billion net tonne kilometres resulted in 105,000 fewer tonnes of CO2 emissions, a 39.4 million litre fuel saving and less congestion and wear and tear on the roads than if that same freight had moved by truck. It also contributed to incremental GDP outputs. The total value of rail to New Zealand’s economy is estimated at $3.3 billion a year,” KiwiRail said.
Meanwhile, NZ media is reporting that Hyundai Mipo Dockyard, the contracted builder of the pair of rail ro-paxes for the abandoned iReX project, is “in the frame” for the replacement vessels. A NZ Government decision on the builder for the latter is due at the end of this month, for 2029 delivery.
