Weak outlook puts brake on Asciano
Asciano expects slower earnings growth in the year ahead as a weak domestic economy weighs on the performance of its rail freight and container ports businesses.
Australia's largest listed ports and rail company posted a 41 per cent rise in net profit, to $340 million for the year to June. Revenue rose 8 per cent to $3.74 billion.
Chief executive John Mullen flagged an increased focus on reducing costs, indicating that it was likely to exceed its five-year target of $150 million in savings. "We have cut our costs harder than we would have otherwise," he said.
Asciano did not have plans for a major redundancy program but Mr Mullen said there could be "some downsizing here and there".
He attributed the higher earnings to volume growth in its Pacific National Coal division following new haulage contracts in Queensland and more work from customers in NSW. Its fastest-growing division reported a 29 per cent rise in pre-tax earnings to $288 million.
But Asciano warned that trading conditions were "extremely challenging" for both its rail freight and ports businesses. Pacific National Rail posted a 2 per cent rise in underlying pre-tax earnings to $217 million for 2012-13, while the ports division's earnings fell 4.5 per cent to $155 million.
Asciano declared a final fully franked dividend of 6.25¢ a share, payable on September 18, up from 4¢ a year earlier, for a full year payout of 11.5¢.
It has forecast a rise in pre-tax earnings in the new financial year, "albeit at a slower growth rate" than in 2012-13 due to expectations of "another challenging year".
While Asciano's coal-haulage division had a strong year, it will be paying more attention to an "efficiency drive" after a period of "helter-skelter growth".
Amid a weak economic outlook, the container terminals business faces the "most difficult year" of the company's main divisions. It is rushing to prepare for the arrival of a third operator in Hutchison Ports, which will open a container terminal at Sydney's Port Botany by the first quarter of next year.
Pressed on whether he would consider buying businesses, Mr Mullen made it clear that, while Asciano would weigh up opportunities, it would not "make acquisitions for the sake of acquisitions".
"We have currently got the radar screen turned on," he said.
Asciano also released its annual report, which showed that Mr Mullen's total pay rose to $4.9176 million for the year to June, up from $3.985 million in 2011-12.