We are pleased to present the Australian Rail Track Corporation’s annual report for 2018-19. This has been a significant year for the organisation, focussed on building solid foundations to deliver the Inland Rail Program, and continuing to invest in our existing infrastructure, our systems and our people.
Throughout the year ARTC continued its strong operating focus and worked closely and collaboratively with our customers to deliver the services required. We remain committed to further strengthen those relationships as we seek to explore new opportunities to grow freight volumes across our non-coal network.
Access revenue increased from $712.9 million to $720.1 million, which includes a $16.2 million increase in Hunter Valley access revenue.
Our Hunter Valley network continued to improve the efficiency and reliability of its operations and assets to meet its customers’ growing demands. The total amount of coal transported on the network was 175 million tonnes. This included export coal of 161 million tonnes transported to the Port of Newcastle, an increase of 1.8 percent from the previous year, albeit in an environment of lower rates of return following the prior years’ ACCC regulatory decisions.
Our Interstate network had a challenging year, with the withdrawal of a major customer, Aurizon, the drought, and a general slowdown in economic activity all impacting on its rail freight container volumes and operating revenues. Despite these conditions, decisive actions were taken across the business to minimise the impact on the overall financial result.
The overall financial outcome for the year reflected these multiple factors, but still culminating in an uplift in operating revenue to $847.7 million compared to $831.0 million in 2018. The revised financial outlook and expenditure profile resulted in non-cash impairment charges for the Interstate Business unit and Inland Rail project totalling $450.7 million (2018 $19.6 million) which, combined with other expense items relating to increased operational activity and the Inland Rail project resulted in a reported Net loss after tax of $448.4 million for the year (2018 $54.3 million net profit after tax).
Despite these difficult financial conditions our balance sheet remained strong, enabling us to pay dividends to our Shareholder of $68.3 million (2018 $65.4 million), support ongoing investment in our rail networks and retain a strong investment-grade credit rating of A1 from Moody’s (FY18: A1).
There are a number of highlights for the year. The Inland Rail program reached a significant milestone, when the Deputy Prime Minister, Hon Michael McCormack MP, launched work on the first section of this nation-building program – from Parkes to Narromine – with community representatives and industry members in December. We are pleased to report that this early work has already provided employment for more than 470 people, including around 280 from the local community.
We also advanced the design of greenfield sections of the program, progressed some construction work earlier than planned, and continued our due diligence on the most complex section, Gowrie to Kagaru.
Over the year, we made significant investments in our existing networks, injecting $109 million of capital into Hunter Valley, and $198 million into Interstate, as well as leveraging our balance sheet to start the construction of Inland Rail.
We also continued to invest in building our workforce and organisational capabilities, recognising that the size and complexity of our business will increase as we scale up to deliver Inland Rail over the coming years.
At the same time, we maintained our focus on developing a stronger safety culture and improving our safety performance. For the first time, we achieved a Lost Time Injury Frequency Rate of zero – a significant achievement that highlights the value of uncompromising emphasis on safety. Our Pathway to Zero safety program has made good progress but we recognise that more needs to be done in our pursuit of our Corporate Value of achieving No Harm across our organisation.
It was also very pleasing to see our customer satisfaction scores improve once again. Customer experience remains at the heart of all decision making and our continued efforts in this area will help the task of working collaboratively with our customers to move more freight across our network.
We also maintained our focus on building our stakeholder and community relationships recognising that with Inland Rail, more work needed to be done to improve our engagement with impacted landowners and other parties. Improvements in this area will define our success in delivering this project in the coming years.
There will be further challenges in the coming financial year, but we have no doubt the right team is in place to operate our complex rail network and deliver major capital projects on behalf of the Australian Government and for the benefit of industry.
We would like to acknowledge and thank the ARTC Board, management team and staff for their efforts in delivering our result over the past year. We would also like to thank our Shareholder for its ongoing support of the Company.