With diesel prices for their B-Doubles and other trucks, it'll...

With diesel prices for their B-Doubles and other trucks, it'll depend (will it not?) on what contracts state about passing through movements in the cost of fuel.

Labour costs may also be rising.

Unfortunately, as 'AFR' is asserting, much of Australia's inflation problem is home grown. Federal (and State) Labor governments are encouraging unions to push for high wage rises that create a 'dog chasing its tail' scenario. Significant inflation may be with us for years, unless governments start to show some spending restraint. With Victoria pressing ahead with out of control infrastructure projects like West Gate Tunnel and the Suburban Rail Loop, this is unlikely, and the Federal government has problem childs such as the NDIS.

With rising interest rates, it depends on when any debt is due for renegotiation. The majority of LAU's $159 million in borrowings as at 30 June 2023 was for equipment leases ($126 million). LAU's net leverage ratio decreased to 1.19 times.

While it remains to be seen what will occur in FY 24, as one example how LAU has expanded, rail revenue has risen from a paltry A$10 million in FY 19 to $126 million in FY 23, and road transport revenue (the original focus of the company) has increased from $240 million to $387 million. Some of this will reflect CPI/cost pass throughs, but there can be no doubt LAU has substantially grown.