logistics associations and business networks we
are working to consolidate ARTC’s position as a
future focused rail business, actively promoting
rail as the number one solution to freight
transport in Australia.
Another milestone achievement for the
year has been the start of operations on the
$960 million Southern Sydney Freight Line
on 21 January 2013. The task to construct a
36 kilometre dedicated freight line adjacent
to the Sydney metropolitan network was a
challenging and complex undertaking however
the benefits to our customers are considerable
and already we have seen a positive impact on
train running performance.
As our vision to make rail the mode of choice
in the national logistics chain in Australia is
realised, we recognise that our operations do
have an impact on communities. ARTC is very
conscious of its obligation to be a responsible
corporate citizen and we will continue to engage,
be responsive and build strong relationships
with local communities adjacent to our network.
In our industry safety is everything. Over
the last year we are proud to recognise the
achievements of our people in keeping the
network safe for themselves, their workmates,
and our customers. We are encouraged by
the improving trends in many of our safety
indicators and some exceptional individual
achievements, including Goulburn, Broken
Hill, Casino and Parkes maintenance teams
achieving five years without a Lost Time Injury
and the Dubbo team achieving eight years.
However, there is still much work to be done
and we will continue to strive to improve our
safety performance with the singular goal to
prevent anybody from being harmed at work or
on our network.
FINANCIAL PERFORMANCE
Whilst weaker intermodal traffic volumes in the
second half of the year affected access revenue
growth on the Interstate network, it was largely
offset by higher than expected Hunter Valley
access revenue for coal shipments through the
Port of Newcastle.
Total access revenue was $660 million, a
22.9 per cent increase over the previous year,
reflecting continued growth in the Hunter Valley
business and strong results in grain and other
bulk traffic on the interstate network.
Underlying Earnings Before Interest Tax
Depreciation Amortisation and Impairment
(EBITDAI) for the full year was $336.2 million
– a 26.7 per cent increase on 2011/12 results,
which continues the strong annual growth that
we’ve consistently delivered since the take-up of
the New South Wales network in 2004.
Despite the improved financial operating result
we do acknowledge that market conditions
remain very difficult and ARTC is intensifying
its efforts to improve productivity and efficiency
within its operations. We also recognise
the need to build a sustainable business
that can provide an acceptable return to our
Shareholders and allow us to re-invest in the
network to support our growth strategy.
In line with that strategy ARTC continued its
significant investment program with capital
expenditure during the year of $0.84 billion in
addition to ongoing rail maintenance.
Since taking up Victoria, New South Wales
and Queensland networks ARTC’s capital
investment in the North South corridor in
particular, is unprecedented. Yet challenging
economic conditions have resulted in a further
impairment loss against the North South
corridor valuation.
The nature of this long term investment
cycle means that as our market share on
this corridor grows, we expect the income
generated in future years to reverse the
current partial write down (impairment
expense) of the significant up-front cost of
this investment in our annual accounts.
Overall this non-cash impairment expense
of $482.0 million, combined with (increased)
depreciation and amortisation charges
totalling $157.9 million and net finance
expense $27.2 million resulted in a net loss
before income tax of $327.0 million for the
year. After inclusion of favourable income
tax adjustments, ARTC’s net loss after tax
of $201.8 million was an improvement of
$18.1 million over last year’s result.
During the year we negotiated new banking
facilities with our finance partners and
successfully completed a further bond issue
on the Australian capital market to support
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