Asciano warns slower growth

Bushfires, sluggish economy hit rail and port operator; guidance maintained.

Asciano (AIO) shares have fallen after the rail and stevedore operator warned of slower growth this year and said its rail network had been damaged by the ongoing bushfires.

The company said the fire damage will affect how much coal it hauls this month.

At 1115 AEDT Asciano shares slipped 3.54% to $5.99, against a benchmark rise of 0.34%. 

However, its coal and port operations continued to drive the business during the September quarter while its rail business struggled with lower volumes due to a sluggish Australian economy.

Chief executive John Mullen has maintained the company's forecast for growth in full year earnings but at a slower rate than the nine per cent increase last year, when it posted a $340 million profit.

Tonnes of coal hauled increased 17% year-on-year for the three months to the end of September to 38,000 tonnes.

But the company warned October's haulage rate will be reduced because of the bushfire damage.

"The recent bushfires have caused extensive damage on the Western line in southern southeast Australia and will impact volumes hauled in October," the company said.

Volumes through its Pacific National Rail business, which moves other goods, slumped due to a weak domestic economy including a fall in grain exports.

Mr Mullen said that, based on current projections by key customers, it expects difficult market conditions to persist for the remainder of the fiscal year in its rail and terminals and logistics businesses.

"(There is) no tangible evidence yet that the recently reported improvement in consumer and business confidence has translated into a sustained pickup in volumes in either division," he said.

Higher volumes through the group's bulk and automotive port stevedore services along with their earnings growth would boost the company overall, Asciano said.

Related Articles