Asciano predicts weaker earnings growth
The company tends to be a reliable indicator of economic health, as it hauls coal and handles commodities and various consumer goods through its rail, ports and stevedoring businesses.
The company’s shares were punished on Friday after i Toms Outlet t said earnings growth would weaken in the current financial year, and said its rail network in the NSW had been damaged by bushfires.
But chief executive John Mullen said business conditions were softer across the board than he had expected, and predicted a tough year for Asciano, with its freight rail business the most troublesome.
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A slowdown in mining and mining services activity in Western Australia was a major contributor, as it represented the bulk of that business.
“At its peak, 1000 people a week were migrating to WA from the east, all of them had to be housed, buy whitegoods, clothed Toms Outlet and fed and now that trend is reversing,” Mr Mullen said.
His comments echo those made by another transport and logistics provider, Toll Holdings, at its annual general meeting this week.
Its managing director said there had been no measurable improvement in the general economic environment.
Asciano maintained its forecast for full year earnings growth, but said it would be weaker than the nine per cent increase made last Toms Outlet year, when it made a $340 million profit.
Mr Mullen predicted volumes would come back in Asciano’s rail business as the economy re adjusted to a post mining investment boom period, and with a decent grain harvest ti Toms Outlet pped.