AAP 2009-09-21 Ports and rail operator Asciano Group still expects this financial year will be tough but says it is well placed to grow earnings, especially in 2010/11.
"Looking forward to 2009/10, Asciano continues to take a prudent approach and plan for a continued difficult operating environment," Asciano chairman Tim Poole and managing director Mark Rowsthorn said in the group's 2009 annual report released on Monday.
"Whilst there are signs within a number of our businesses that volumes may be stabilising following significant weakness during the March quarter, there remain few, if any, indications of an imminent recovery in the domestic and international economies."
Asciano would focus on three objectives over the next 12 months: completing the restructuring of the group's balance sheet; continuing the rollout of its new coal haulage operations by rail operator Pacific National in Queensland; and cutting costs, with the aim of making about $95 million in efficiency gains by the 2010/11 financial year.
Despite there being no certainty of any sustained recovery in economic activity during the coming year, Asciano said it was well placed to deliver earnings growth.
"Looking beyond 2009/10, the outlook is very positive for the 2010/11 financial year," Asciano said.
"The combination of a full year's contribution from Queensland coal, a full year of efficiency review benefits, and the expectation that the Australian and global economies should be moving into a recovery phase during the year, provides a high degree of confidence that Asciano should experience significant earnings growth."
Asciano said that in the current financial year, its key bulk handling and haulage businesses should continue to perform well, with sustained strong demand expected to underpin growth in coal volumes from New South Wales' Hunter Valley.
Early indications and recent rainfall suggested a modest grain harvest, particularly in NSW, was a possibility.
But non-bulk volumes were expected to remain soft.
Some stability might return to key non-bulk categories such as containerised freight, steel and motor vehicles, but there were no indications of an imminent recovery in volumes to previous levels.
Asciano said its board had announced its intention to pay a distribution in the 2010 financial year but the timing and size was yet to be determined.
The annual report showed that Mr Rowsthorn had a "take home" pay of $2.56 million for 2008/09, comprising $1.82 million in fixed annual remuneration and $741,680 in short-term incentives. Twenty-nine per cent was performance-based.
The value of long-term incentives for fiscal 2009 was zero because no options had vested under Asciano's long-term incentive plan during the period.
Asciano said it had changed the format of its remuneration report to include details of the "take home" pay of executives so that unitholders could better understand the amount executives actually received.
Asciano booked an annual net loss after significant items for 2008/09 of $244.1 million, compared to a loss of $181.5 million in the prior year.
The result included $243 million in significant items before tax, including a $142.6 million impairment charge against the group's car storage and handling operations.
Earnings before interest, tax, depreciation and amortisation (EBITDA) over the 52-week period rose 0.4 per cent to $655.2 million.
Asciano units were 0.5 cents higher at $1.735 at 1545 AEST on Monday.
