KiwiRail has released its financial results for the 12-month period ending June 30, 2024, showing a resilient performance despite enduring significant challenges in the freight sector. The state-owned enterprise reported an operating surplus of $105.6 million for its above-rail services business, marking a 33% decline from the previous year, yet exceeding forecasts amidst global and domestic freight market deterioration.

Over the past year, KiwiRail faced one-off impacts amounting to $25.9 million that influenced its overall results. Excluding these exceptional costs, the operating surplus would have reached $131.5 million. Rob Jager, Acting Chair of KiwiRail, noted positive trends in specific areas, including an 11% increase in forestry revenue, a 15% rise in Interislander passenger numbers, and a remarkable 41% increase in revenues for Great Journeys New Zealand services. However, the company faced challenges with import/export freight, down 11%, and domestic freight, which decreased by 6%, correlating with the broader economic climate in New Zealand. 

“The reduction in domestic and import/export freight was disappointing but not unexpected,” Mr. Jager stated. “Consumer confidence has dropped, resulting in reduced volumes affecting both road and rail operators.”

KiwiRail's commitment to safety has paid dividends, with a notable 11% reduction in the total recordable injury frequency rate, which now stands at 23.3 injuries per million person hours. Furthermore, high-potential critical risk near-miss events saw a dramatic decrease of 71%, reflecting a cultural shift towards a stronger safety ethos within the organisation. 

The financial year also saw KiwiRail invest a substantial $1.5 billion in capital projects, marking a record level of expenditure aimed at enhancing the 3700-kilometre rail network. Chief Executive Peter Reidy emphasised the importance of this investment in readiness for future growth.

“We have been working intensively to prepare Auckland for the City Rail Link (CRL), which is key to providing faster, more reliable services for both passengers and freight,” Reidy said. “This considerable investment is beginning to yield tangible benefits, showcased by our improved reliability metrics in Wellington and Auckland, with on-time performance for premier freight services rising to 89%.

In addition, the Interislander service has seen a 5% revenue increase, bringing in $158.3 million, with reliability reaching an impressive 96% for services delivered, excluding weather-related disruptions, and an on-time performance rating of 86%. Recent inspections by international maritime assessors from Det Norske Veritas (DNV) confirmed that the ageing ferries have been well maintained, ensuring safe and reliable operations until 2029.

KiwiRail is determined to transform into a financially sustainable entity capable of funding its own capital expenditures. Mr. Reidy concluded, “The challenges in the freight and transport sector are significant, yet we have made strides in safety, service reliability, and asset availability, positioning ourselves for future growth.”

As KiwiRail navigates the complexities of a volatile freight landscape, it remains focused on enhancing customer experiences and competitiveness to capture market opportunities in the economic recovery ahead.