Australia's QR says softer coal volumes persist in Q1

SYDNEY: Australia's largest coal freight company, QR National, posted a maiden net profit in line with expectations after cost cuts helped offset a sharp fall in coal haulage volumes which persisted into the first quarter of the current year.

QR National, which floated in November last year, said it expected continued growth from resources and bulk commodities but was cautious about the recovery of coal haulage volumes hit by severe floods last year.

"Softer coal haulage volumes in Queensland have persisted into the first quarter, with customers continuing to report a delayed return to full production levels," Chief Executive Lance Hockridge said, adding year-to-date coal railings were 18 percent below last year.

QR National posted a maiden full-year profit of A$350 million ($368.6 million) compared to a loss of A$222 million a year ago. The result included a substantial uplift from tax arrangements and accounting changes, the company said.

Earnings before interest and tax (EBIT) were A$367 million. This was broadly in line with consensus forecasts of A$364.6 million, according to Thomson Reuters.

The result included a A$187 million impact from floods in Queensland state which hit coal haulage volumes.

Full-year revenue grew 11 percent to A$1.2 billion.

QR National said it expected to spend A$1.6 billion on capital expenditure projects this year and declared a final dividend of 3.7 cents.

Hockridge said QR National would cooperate with BHP Billiton and other mining companies seeking to set up their own rival rail operations.

"We are more than happy to support and facilitate others looking at what the sensible outcomes would be. We don't expect to do 100 percent of everything in Queensland, the sheer scale would mitigate against that," Hockridge told reporters, saying the company was open to "anything".

BHP has said it plans to build a new rail line between some of its inland Australian coal mines in Queensland state.

QR National shares closed on Friday at A$3.19. The stock, which was issued to institutional investors at A$2.55 last November, has defied weak markets despite the impact of severe flooding on its coal haulage operations.

Copyright Reuters, 2011