Port and rail operator Asciano says it is getting tougher to meet earnings growth targets because of a weak economy.
The company's profit of $190 million in the six months to December 31 was relatively steady from a year earlier, and chief executive John Mullen said he still expects earnings growth of at least five per cent for the full financial year.
But he toned down the rhetoric around Asciano's growth target of 10 to 15 per cent by 2015/16 because of an economic malaise.
Asciano's success is strongly linked to the overall economy, as a transporter of retail and industrial products, commodities, cars and general cargo.
Declines in both the mining and agriculture sectors, and a slowdown in activity and increased competition at Australian and New Zealand ports were factors in the flat half year profit result.
"Four years ago we certainly did not anticipate the economic conditions we are now seeing," Mr Mullen told AAP.
"If you look forward to fiscal 2016, clearly maintaining this level of earnings growth looks challenging without an economic rebound or without contributions from acquisitions or more structural change."
Earnings in Asciano's bulk and automotive port services dropped well below expectations, falling 55 per cent.
Jobs are to be cut from the division, with Asciano flagging $2.5 million in pre-tax redundancy costs.
The company says the opening of a new automated container terminal at Sydney's Port Botany in April - which involved major job cuts - will strengthen its competitiveness against other Australian port operators.
Despite weakness in the coal sector, where many miners are making losses, the industry continues to be profitable for Asciano and rival rail group Aurizon.
Volumes were up almost six per cent, and were a major factor in earnings growth of 19 per cent in Asciano's Pacific National rail business.
Asciano and Aurizon are benefitting from coal miners lifting producing to offset the weaker prices, and locking miners into multi-year contracts.
Asciano's shares were down 15 cents, or 2.3 per cent, at $6.26 at 1530 AEDT.
The company also announced chairman Malcolm Broomhead will retire at the annual general meeting in late-2015.
WEAK ECONOMY MEANS FLAT PROFITS FOR ASCIANO
* Half year net profit up 1.2 pct to $189.7m
* Revenue down three pct to $1.95b
* Interim dividend of 8.25 cents a share, up from 5.75 cents
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