2011 Annual Report 3.0MB
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Dominic D Smith SVP & Company Secretary QR National Limited ABN 14 146 335 622 Level 14, 305 Edward Street Brisbane QLD 4000, Australia GPO Box 456 Brisbane QLD 4001, Australia T +61 7 3235 1976 F +61 7 3235 2188 [email protected] 6 September 2011 Company Announcements Office Australian Securities Exchange Limited Riverside Centre, Level 5 123 Eagle Street BRISBANE QLD 4000 BY ELECTRONIC LODGEMENT QR National – Annual Report Please find attached a copy of QR National’s 2011 Annual Report. In accordance with the relief from dual lodgment of financial statements under ASIC Class Order 98/104, the Annual Report will not be lodged separately with ASIC. Copies of the Annual Report are expected to be dispatched to all shareholders, whom have elected to receive a copy of the Annual Report, at the end of September 2011. The Company’s Annual General Meeting will be held at 10:00am (Brisbane time) on 10 November 2011. A copy of the Notice of Annual General Meeting is expected to be sent to all shareholders at the end of September 2011. Yours faithfully QR National Dominic D Smith SVP & Company Secretary QR National Limited ACN 146 335 622 transformation AnD GroWtH AnnuAl RepoRt 2010–11 ContENTS ChAIRMAn’s RepoRt 5 Ceo’s RepoRt 8 yEar in rEviEW CoAl 18 fReIght 23 netwoRk seRvICes 27 CorporatE soCial rEsponsibility sAfety 37 people 39 CoMMunIty 40 envIRonMent AnD sustAInAbIlIty 43 GovErnanCE DIReCTORs’ RepoRt 46 CoRpoRAte goveRnAnCe 80 finanCial rEport QR nAtIonAl fInAnCIAl RepoRt 2010–11 89 Queensland bulk, Darwin regional freight and intermodal Cairns Queensland Northern Townsville coal systems Port Hedland Territory Mt Isa Dampier Mackay Rockhampton Gladstone Alice Springs Queensland Queensland Western Australia coal operations Brisbane South Australia Geraldton Kalgoorlie New South Wales New South Wales Port Augusta Perth coal operations Fremantle Newcastle Esperance Sydney Port Kembla Western Australia Albany Adelaide bulk and freight East-west Victoria Canberra intermodal Melbourne North-south QR National above rail operations intermodal QR National below rail operations (CQCN) Tasmania QR National does not operate Hobart QR NATIONAL LIMITED > ACN 146 335 622 QR NATIONAL QR National is Australia’s largest rail freight operator with more than 145 years of experience. Each day the Company moves thousands of tonnes of coal, iron ore and other minerals as well as agricultural and general freight around the nation. QR National operates and manages a coal network made up of approximately 2,300km of heavy haul rail infrastructure. The Company also provides a range of specialist services in rail design, engineering, construction, management and maintenance, and offers large-scale supply chain solutions to a diverse range of customers Australia-wide. QR National has played a critical role in the economic development and growth of the minerals-rich state of Queensland, providing the transport backbone for one of the world’s largest coal supply chains. Over recent years QR National has extended its business focus beyond its Queensland heritage and applied its expertise and capabilities to coal and iron ore opportunities in New South Wales and Western Australia. QR National comprises three separate but integrated operating businesses – Coal, Freight and Network Services. QR National Coal is the world’s largest rail transporter of coal from mine to port for export markets and transports approximately 200 million tonnes of coal per annum. QR National Network Services operates and manages the Central Queensland Coal Network, which is the largest export coal rail network in Australia and comprises the major coal systems in Queensland’s Bowen Basin. It is also one of the largest rollingstock maintenance and manufacturing businesses in the Southern Hemisphere. QR National Freight transports approximately 60 million tonnes per annum of bulk minerals and commodities including iron ore, agricultural products, mining and industrial inputs and general and containerised freight. The business is Australia’s largest iron ore haulier outside of Western Australia’s Pilbara region. QR National’s performance and future growth is linked to the key demand drivers of the Australian resources sector. As a result, the Company is well placed to benefit from the expected growth in demand for coal and iron ore, particularly from emerging Asian economies such as China and India. EbitDa Ebit rEvEnUE Underlying results(1) Underlying results(1) $A million $A million $A million 4000 1000 400 800 3000 300 600 2000 200 400 1000 100 200 0 0 0 FY2008 FY2009 FY2010 FY2011 FY2008 FY2009 FY2010 FY2011 FY2008 FY2009 FY2010 FY2011 (1) Underlying results differ from the Group’s statutory results. Refer reconciliation to statutory earnings on page 129. Image: Callemondah rail yard at dusk ANNUANNUAALL REPORtREPORt >> 2010–112010–11 011 02 QR NATIONAL $3 294m+11% REVENUE ’EARNED FOR THE YEAR +17% $813m UNDERLYING EBITDA FOR THE YEAR* $367m+35% UNDERLYING EBIT FOR THE YEAR* +7% $9162m TOTAL ASSETS AS AT 30 JUNE * Underlying results differ from’ the Group’s statutory results. Refer reconciliation to statutory earnings on page 129. ANNUAL REPORt > 2010–11 03 Tracklaying near Bowen, Frank O’Neill, Zac Moss and Nigel Green 04 QR NATIONAL > CHAIRMAn’s reporT CHAIRmAN’S REpORT I am delighted to present QR National Limited’s Annual Report for the defining eary that was 2010–11. The 2011 financial year marked the start of an exciting new chapter in the 145-year history of QR National, Australia’s pre-eminent rail freight business. The Queensland Government’s decision to privatise QR National paved the way for the nation’s largest public float in more than a decade, with the Company successfully listing on the Australian Securities Exchange (ASX) in November 2010. As a listed entity, QR National has With the backing of more than 60,000 QR National’s financial performance for increased flexibility and greater capacity shareholders from around the world and the 12 months to 30 June 2011 is set out to grow and prosper through serving our a clear strategic growth and reform path, in this report. However, in summary, a profit customers as a commercially-driven leader QR National is well on its way to demonstrating after tax of $350 million was reported for the in coal, other bulk, general freight rail haulage its great potential. As Chairman of the 2010–11 year. Underlying* Earnings Before and rail networks. The Company is positioned QR National Board, I extend a warm welcome Interest and Tax (EBIT) was $367 million, a in the Australian market, with access to major to all shareholders who have joined us since 35 per cent increase over the prior year, and growth opportunities in partnership with listing, and reiterate our commitment to earned on revenues of $3.3 billion. our customers in the supply chains that extracting maximum value from the On the basis of these results the Board connect mines to global markets. Company’s exceptional assets on your behalf. declared a dividend of 3.7 cents per share, STRONG MARKET DEBUT RESULTS which will be paid to shareholders on 30 September. This dividend is in line with The ASX listing unlocked significant QR National’s achievements in the first the Offer Document and our policy to value in the business. Since the Initial year of listing were set against the backdrop distribute up to 50 per cent of net profit Public Offering (IPO), QR National’s market of some extraordinarily challenging operating after tax, subject to Board discretion capitalisation has , as at 30 June 2011, conditions. The impact of the devastating regarding alternative investment and grown to in excess of A$8 billion, positioning Queensland floods and Cyclone Yasi on coal growth opportunities, as well as a focus it among Australia’s 50 largest listed production throughout the state has been on maintaining a strong credit rating and organisations. Total Shareholder Returns widely reported and led to a substantial enhancing long-term shareholder value. for 2010–11 were in the top quartile of all reduction in actual QR National coal haulage S&P/ASX 50 stocks for the year. The retail compared to expectations. However, the share price rose by 38 per cent from the date Company benefited from improved margins of listing to 30 June 2011. with improvements in capital efficiency, an array of transformation initiatives and the introduction of more commercially structured contracts, which partially offset the financial impact of the reduced tonnages. *Underlying results differ from the Group’s statutory results. Refer reconciliation to statutory earnings on page 129. ANNUAL REPORt > 2010–11 05 CHAIRmAN’S REpORT (continued) GROWTH AND This critical new piece of national export CORPORATE GOVERNANCE TRANSFORMATION infrastructure is on track to open in January I believe the composition of the 2012 and will provide significant benefits for A fundamental driver of global QR National Board of Directors is world-class. coal customers, QR National shareholders and investment interest in QR National is the Collectively our Directors have significant the broader Australian economy. It is just one organisation’s clear potential to add value listed-company experience and expertise of many examples of QR National working through widespread reform. Sophisticated spanning operational, technical, legal, in partnership with industry to deliver supply investors understand the benefits inherent financial and industrial disciplines. The chain solutions to meet growing global export in transforming a century-old government guidance of the QR National Directors demand for Australian resources. railway into a commercially-focused managing the broad and complex range of organisation capable of achieving superior CORPORATE SOCIAL issues presented throughout the privatisation outcomes for all stakeholders. With the IPO RESPONSIBILITY and IPO proved to be invaluable to the now behind us, QR National is focused on process. The Board worked together to Safety is QR National’s core value and realising the benefits of business reform.