24 October 2007
An underlying operational profit of $4.2 million, plus a tax
benefit following an increase in the valuation of Spirit of
Tasmania I and II, has resulted in TT-Line Company
Pty Ltd delivering a profit of $10.6 million in 2006/07.
Chairman Denis Rogers said several initiatives were introduced
throughout the year by TT-Line management that assisted the company
to turn around its performance in a relatively short time
frame.
"The initiatives, specifically designed to control costs and
increase passenger numbers, were extremely successful," he
said.
"As a consequence the core Devonport to Melbourne route returned
to profitability in 2006/07, recording a $5.9 million profit
compared to a $6.1 million loss the previous financial year."
Mr Rogers said Spirit of Tasmania I and II
were independently revalued in 2006/07 and again increased in value
because of a buoyant market, the extensive lead time required to
build new vessels and the increased cost of the commodities used to
build ships.
This increased valuation has resulted in TT-Line booking a
taxation benefit of $5.9 million as required by International
Accounting Standards.
The Spirit of Tasmania III sale was settled in
Melbourne on 6 September 2006 in line with the memorandum of
agreement signed between TT-Line Company Pty Ltd and Corsica
Ferries.
Spirit of Tasmania III was renamed Mega Express Four
and is now operating under the Italian flag registered in
Genoa.
Mr Rogers said the Board decided to extend the operating lives
of Spirit of Tasmania I and II to 2017.
"This decision will require the
company to allocate increased resources to ensure both vessels
remain in good condition throughout their working lives on Bass
Strait," he said.
"The normal life for TT-Line Bass
Strait ships has been 10 years.
"Previously, the vessels acquired by the company have been eight
to nine-years-old whereas Spirit I and II,
purchased in 2002, were only four-years-old.
"Based on this, and subject to the vessels being maintained and
kept in good condition, our view is they will be able to service
the market for another 10 years.
"During the year the Tasmanian Government contributed $22.5
million in equity funding that was used to repay debt.
"The interest savings resulting from this contribution will be
used to fund projects relating to extending the life of Spirits
I and II.
"It is important that TT-Line has
adequate cash reserves available to undertake this work."
During the 2006/07 financial year
total revenue was $155.3 million while TT-Line vessels carried
393,677 passengers, 177,786 passenger vehicles and 77,734 TEUs of
freight. (These figures include two months of Spirit of
Tasmania III operations between Sydney and Devonport.)
The Federal Government provided $28.5 million under the Bass
Strait Passenger Vehicle Equalisation Scheme, which was passed on
to passengers directly through reduced vehicle fares.
It is also important to note the very important contribution the
company makes to the economy of Tasmania annually.
Direct and indirect value of the company's employment of staff
totals $28.8 million alone, while expenditure by sea visitors to
Tasmania who travelled on a Spirit of Tasmania vessel
injected approximately $326 million into the state's economy in
2006/07.
In addition, goods and services purchased by TT-Line, including
engineering works, port fees, food and beverages, laundry services,
stevedoring services and security services, were directly and
indirectly responsible for injecting a further $37 million into the
economy.
Mr Rogers said while an operational profit of $4.2 million and
an overall profit of $10.6 million was a pleasing result for the
organisation, the challenges will continue to confront the
company.
"A new discount airline operator servicing Tasmania and average
domestic tourism forecasts are just two examples of the challenges
the company will face in 2007/08 and which will continue to require
innovative solutions to overcome them."
-ends-
Released by:
Nicolas Turner
Tel: 6270 2250 or 0418 538 865
