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Australia Freight Transport Report Q4 2009
Market |
Logistics |
Report Type |
Market Research |
Country |
Australia |
Published |
18 August 2009 |
Number of Pages |
59 |
Download |
|
Immediate |
|
Publisher |
Business Monitor International |
Australian rail and port operator Asciano in mid-June called off its proposed asset sale, and is instead planning to raise around AUD$2bn in new equity through a share sale. The move will enable the company to retain all assets and existing management. The announcement followed an offer from investment bank UBS to underwrite the share sale, which includes a proposal for AUD770mn rights issues to existing shareholders at a 40% discount and an AUD230mn underwritten placement. In addition, there are plans for a further AUD1bn placement, which will be conditional on shareholder approval, according to The Australian. Earlier, on June 9, BMI reported that Asciano had received four final proposals for the acquisition of either the entire company or a number of its assets. These had come from private equity company Carlyle Group, private investment firm TPG Group and Global Infrastructure Partners – which was set up by Credit Suisse and General Electric. Further details of the bids, and the identity of the final bidder, were not available at the time. Asciano has now decided not to move forward with the asset sale, and instead will raise much-needed funds through a share sale. The company has been having financial difficulties due to high levels of debt since it was created in 2006 from the restructuring of Toll, which separated the ports and rail business under Asciano and its logistics division under Toll Holdings. The latest move is good for Asciano, as it enables the company to retain all assets at a time when the market value for some of its transport infrastructure would have been depressed for a number of reasons.
Despite a number of positive fundamentals, BMI sees the global economic slowdown having an ongoing impact on the Australian freight sector. Demand for some of the country’s key mineral and agricultural exports has eased back, and the pressure on parts of its road, rail, and port systems has reduced during the course of 2009. According to our latest forecasts, Australian GDP will fall by 1.5% this year, and growth will average 1.4% in the period of 2009-2013. We expect freight carried to grow by an annual average of 2.1% during the five-year forecast period. The total value of transport and communications GDP will rise to US$74.9bn 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 or slower than 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 2.1% average annual growth in freight carried. We now expect rail freight to grow by 1.9% 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 1.8%, a figure that takes account of a fairly slow 2009/10. Growth in sea freight, influenced by a big downturn in 2009, will average 2.6% over the next five years.
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