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ANL annual report confirms Government actions

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News Release Hon. Laurie Brereton MP Minister for Transport ♦ Minister for Industrial RelationsT l/95 31 January, 1995ANL ANNUAL REPORT CONFIRMS GOVERNMENT ACTIONSThe former Chairman o f Australia’s national shipping line, ANL Ltd, had hopelessly under-estimated the company’s trading position when he forecast it would break even for the year ending 30 June 1994, according to the ANL annual report and accounts.The Federal Minister for Transport, Laurie Brereton, said the result confirmed the Government’s actions o f last August to remove the board and replace it with a new board commissioned with the task o f restructuring ANL.The accounts, tabled in Parliament today, show an operating loss o f $23m for the year 1993-94. In December 1993 the former Chairman, Bill Bolitho, predicted in a news release that the company would “at least break even in 1993-94”.“The figures further illustrate the parlous state of ANL’s finances, a position first revealed by the due diligence report which Mr Beazley and I commissioned last year, and which w e released on 22 August,” Mr Brereton said.“They show a marked decline in ANL’s trading position over the year with the operating loss being nearly double the $11.7m figure for the previous year.“It was evident following the due diligence, and it is even clearer now, that the Government needed to act quickly to stop the haemorrhaging o f funds from ANL, a bill footed by Australian taxpayers.”The accounts show a consolidated loss for the year o f $ 129.6m after tax and abnormals which includes a provision for costs estimated to be $79m which may be incurred by the new board in its restructure o f ANL.Mr Brereton said this provision had been calculated on the basis o f independent advice and the board’s best estimate o f restructuring costs. It reflects further losses expected for the current year, as well as costs associated with possible changes in operating arrangements for some o f ANL’s assets.“No-one should be allowed to forget that ANL has incurred operating losses in six o f the last seven years, losses averaging $19 million per year,” Mr Brereton said.“The accounts reveal that the former board sold one vessel to its domestic container shipping joint venture, Coastal Expressline Pty Ltd in February 1994. ANL’s fleet o f ships has fallen dramatically from its ownership of 23 o f its 33 vessels in the early 1980s to ownership o f just four o f its fleet o f 12 vessels today.”

ANL still has significant liabilities, including off-balance sheet operating leases on vessels and containers, and has made substantial trading losses particularly in the international trades which represent 70% o f its turnover.

The company’s investment in terminals and stevedoring businesses again paid no dividends in 1993-94.

Mr Brereton said he expected a preliminary report from the new board in late February and a final report on the restructure before the end o f May, 1995.

“In spite o f the company’s difficulties, I am hopeful that the new board under the leadership o f Neville Wran will lead to a positive outcome which will see ANL continue to serve Australia without the need for continuing taxpayer subsidies,” Mr Brereton said.

Media contact: Kate Hannon (06) 277 7320