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Ports and rail operator Asciano says positive cash flow and a strong balance sheet mean it can now take advantage of emerging business opportunities after surviving four years of losses.
Asciano transformed from an extremely indebted, loss making company fighting for survival, to a company that was now in "pretty good shape", chief executive John Mullen said on Thursday.
Speaking to investors three weeks after Asciano posted its first net profit in four years, he said the company was winning new business in all three of its divisions: Pacific National Rail, Pacific National Coal and Patrick (ports).
Volume growth in Pacific National Rail picked up in the last two months, and Patrick was now regaining market share.
Last month, Mr Mullen announced Asciano's decision not to demerge its ports and rail operations after an exhaustive review of strategic alternatives available to the company.
On Thursday he said Patrick was performing better than is often thought and there was no guarantee that most of the perceived benefits of a demerger would materialise.
Asciano's earnings before interest, tax, depreciation and amortisation (EBITDA) kept growing throughout the global financial crisis when many other companies suffered earnings shrinkage.
Earnings and margins continues to grow, return on capital (excluding goodwill) is already above 17 per cent, and the company has $950 million in liquidity and strong cashflows allowing it to finance expansion internally, Mr Mullen says.
"Within the next 12 months we will have a different set of opportunities that we haven't had before," he said referring to acquisitions.
Opportunities to achieve cost savings also abound, with Mr Mullen conceding Asciano has not given much focus to costs over the past year.
Asciano says its revenue growth and margin improvement will deliver an EBIT compound annual growth rate of more than 15 per cent until 2015/16.
Its stock gained eight cents, or 5.6 per cent, to $1.515.
© 2011 AAP
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