While a leading coal miner (Macarthur) was upping its profit forecast, one of the country’s major coal carriers was sounding a note of caution about its outlook.
Ports and rail operator Asciano Group told the ASX yesterday it had become more cautious about its full year outlook as it hauled more coal in the September quarter, but not as much as the group had expected.
The September quarter trading update was released as the company held its AGM.
"The first quarter operating statistics has resulted in management becoming slightly more cautious about the full-year outlook," Asciano chief executive Mark Rowsthorn said in the update.
"Our ability to achieve our targets will be dependent on supply chain constraints in NSW and level of weather-related infrastructure and coal production issues in Queensland, which are predominantly outside of our control.
"The second quarter will provide management with more clarity around full-year expectations."
The market took fright at the veiled warning and sold the shares down more than 7c, or 4.3%, to $1.565.
Asciano said the volume of coal hauled by its Pacific National rail freight business was strong, driven by new tonnages in Queensland.
Volumes rose by 26.9%, compared to the September quarter in 2009 (that’s because of several new contracts with Queensland exporters).
"Despite significant growth overall, coal haulage volumes were slightly below management expectations," Asciano said.
Volumes in Queensland were lower than expected as weather conditions affected mine production, which resulted in a temporary softening of demand.
"The potential to make up the shortfall in expected volumes is dependent on the performance over the remainder of the financial year of the coal supply chains in Queensland and NSW," Asciano said.
Growth in the Hunter Valley in NSW was affected by two derailments and congestion in the network.
Asciano said volumes hauled by the Pacific National intermodal business, which moves containers and steel, were in line with management expectations, while demand for superfreighter services remained relatively flat.
The high growth in steel volumes experienced in the last financial year had slowed, but volumes for the quarter were still ahead of last year and container freight remained stable year on year.
The Patrick container ports business lifted 1.3% fewer containers in the September quarter compared to the prior corresponding period.
"Volumes in the second quarter are expected to reflect the normal seasonal input," Asciano said.
"Patrick remains cautiously optimistic on the forward outlook."
Toll Holdings shares ended down more than 6.5% after it confirmed that founder and long time CEO Paul Little will be leaving.
After emerging from a trading halt, the transport and logistics company announced that it expects to complete the transition of CEO by January 2012.
Mr Little said in a statement that he would ‘‘love to do this job forever’’ but after consideration decided ‘‘it is clear this is the ideal time for a changeover at the top’’.
‘‘I am committed to Toll’s future and look forward to overseeing a smooth transition to new leadership,’’ he said.
Investors would have liked him to stay, judging by the sharp, 7% fall yesterday to the day’s low of $6.16. Toll shares closed marginally higher than that at $6.20 for a loss of 6.6%.
The company said that details of the transition arrangements will be disclosed to the market once finalised.
"To ensure the integrity of the process is maintained the company will not be commenting further about the global search until a decision on a new Managing Director has been made," the company said.
Mr Little plans to eventually return to Toll as a non-executive director after a stand-down period.
Toll used to control the assets in Asciano, until they were spun off in a controversial float several years ago.
Asciano holds many of the assets Toll bought in its bitter 2006 $5 billion takeover of Patrick.
Asciano was ladened with debt and the downturn has forced it to take billions of dollars of write-downs and losses on asset values and on an abortive attempt to stalk Brambles.
Toll was also buying Brambles shares and got sprung by the market which forced Mr Little to separate his company and himself from the ambitious of Asciano and its CEO Mr Rawsthorn.
Mr Rowsthorn is the son of one of the co-founders of Toll, Peter Rowsthorn, a former boss of Mr Little before Toll was started.
Mr Little intends to retain his 5% stake in the company, which makes him one of the company’s largest shareholders.
That stake is worth around $230 million. His retirement announcement cost him around $20 million.
