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Australia Freight Transport Report Q3 2009
Market |
Logistics |
Report Type |
Market Research |
Country |
Australia |
Published |
9 June 2009 |
Number of Pages |
61 |
Download |
|
Immediate |
|
Publisher |
Business Monitor International |
Asciano Group, Australia's largest ports and railways operator, revealed in April this year that it was considering takeover offers from a number of unnamed bidders (according to The Australian newspaper).
The report notes that in March 2009, the company announced that it would consider offers for various business divisions as well as the company as a whole in an effort to reduce the group's debt burden – which is reported to be US$4.78bn. The company (whose subsidiaries include terminal operator, Patrick Container Ports, and freight railway, Pacific National Intermodal) announced on April 21 2009 that it was considering proposals, thought to be non-binding, for a ‘range of assets, together with a number of proposals relating to transactions that may result in a change of control and/or recapitalisation of the group'. The group declined to name any of the bidders, however. Industry observers have suggested they may include private equity firms, Carlyle Group and TPG Capital among others, (again, according to The Australian). Asciano revealed in August 2008 that is had received a joint-takeover offer from TPG and Global Infrastructure Partners, which valued the company at US$3.07bn. The bid was rejected on the grounds that it fell below Asciano's valuation. The report draws attention to the fact that the company recorded a net profit of US$32.44mn for the first half of the financial year ending June 30 2009, and has total assets of US$5.18bn. However, as said, the company carries a high level of debt, reported at US$4.78bn as of December 31 2008. This is due to mature between May 2009 and May 2012, forcing it to look to raise cash through the sale of assets.
Despite a number of positive fundamentals, the report nevertheless expects the global economic slowdown to have an impact on the Australian freight sector. Demand for some of the country’s key mineral and agricultural exports should ease back, and the pressure on its road, rail, and port systems should reduce during the course of 2009. According to our latest forecasts, Australian GDP will fall by 1.4% this year, and growth will average 1.9% in the period of 2009-2013. We expect freight carried to grow by an annual average of 2.6% during the five-year forecast period. The total value of transport and communications GDP will rise to US$63.9bn in nominal terms by 2013, representing 5.7% of Australia’s GDP.
In advanced economies, freight transport tends to grow at roughly the same pace as the economy as a whole. In Australia, however, we believe there is continuing upside potential in the freight sector. This reflects the size of the country’s infrastructure development opportunities and the strong potential, once the current recession has been negotiated, for the continuing growth of mineral exports. Airfreight, affected by the current downturn in the global market, will see 3.3% average annual growth in freight carried. We now expect rail freight to grow by 2.5% per annum, with strong mining exports and infrastructure development coming into play after the current adverse international conditions improve.
Road haulage freight carried will achieve average annual growth of 2.4%, a figure that takes account of a fairly slow 2009/10.
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