KiwiRail has announced a loss of $31 million in revenue for the year ending December 2024, 15,1. The company attributes the decline to a slow economy, changing import patterns, delayed export growth and network disruptions.
Economic Recession and Operational Challenges
KiwiRail’s non-service operating income came to $359,9 million, while its operating surplus fell to $25,8 million, well below last year’s $14,7 million. The closure of Winstone Pulp International and the collapse of the Tawhai tunnel have also added to the challenges. Line delays and redundancy costs are also putting pressure on finances. The company’s rail freight tonnage fell by seven per cent in the six-month period, in line with a broader freight market decline.
The Vital Supply Chain Role and Strategic Efforts
While KiwiRail acknowledges that the economic downturn has had a rapid impact on operations, interim chairman Rob Jager stresses the company’s vital supply chain role. He says efforts to improve service levels through customer collaboration will position the company positively when economic confidence returns.
Conversion and Productivity Increase
Chief Executive Peter Reidy reiterated the company’s commitment to supporting customers through the challenges and is confident that consistent, superior service will drive growth and customer loyalty. Developments such as the post-cyclone restart of the North Auckland Line, the return of Fonterra and the restart of the coal programme also bode well for the company’s future.
KiwiRail is focusing on a multi-year transformation program to reshape operations to better meet customer needs and shareholder expectations. These transformation efforts have delivered savings of $20 million in six months and increased operational efficiency.
Efforts to Adapt to Market Changes and Remain Competitive
Despite the revenue declines, KiwiRail continues to proactively adapt to the challenging business environment. The company is focusing on operational excellence and making strategic adjustments to address both short-term and long-term challenges to remain competitive in the market. Analysts say these strategic steps reinforce KiwiRail’s strong position in New Zealand’s logistics sector.
As KiwiRail navigates the economic challenges, it aims to build a solid foundation for future uncertainties by focusing on resilience and growth. Proactive measures aim to secure the company’s long-term success.
