Asciano to cut 500 jobs

Asciano (AIO) will cut around 500 jobs by June 30 as it eyes a $90 million cost reduction in fiscal 2015 as part of an acceleration of its business improvements programs (BIP).

The rail freight operator told an investor briefing in Sydney that its original five-year BIP, announced in fiscal 2011, has been doubled to $300m in savings by fiscal 2016.

As a result of the business improvement initiatives, Asciano expects growth in fiscal 2015 earnings before interest and tax (EBIT) at a higher rate than in the previous year despite the expectation of relatively low volume growth across the business.

The group maintained guidance for fiscal 2014 for underlying NPAT for low single digit growth.

Asciano said pre-tax material items are now expected to be in the range of $120 million to $130 million. This is due largely to the costs associated with the integration of the Pacific National rail divisions and the costs associated with the restructure of corporate and shared services.