QR National to cut 900 jobs, possibly more

Rail freight company QR National has left the door open for more redundancies after confirming it will axe 900 jobs as part of a major cost cutting program.

The company will incur a one-off redundancy cost of $75 million in fiscal 2013, accounting for a total of 1,560 jobs shed since 2011 amid softening demand for Queensland coal.

QR National on Thursday said it would accept about 750 voluntary redundancies as part of its ongoing restructure.

Combined with staff cuts already carried out this calendar year, the total number of jobs being axed will be 900 in the 12-month period.

Managing director Lance Hockridge said the two rounds of redundancies would cut administrative overheads, adding that more savings could be made.

"Yes, there will be continuing opportunity for efficiency," he told a briefing.

"I don't believe it will necessarily be of the same magnitude."

He said the company anticipated softer demand for coal haulage due to project delays, the Queensland floods, mines not running at full capacity and industrial issues.

"There has been without doubt an impact of softening demand in the end market place," he said.

Globally, there was a movement away from Australian coal, particularly Queensland coal, following an uplift in North America.

"That will come back," he said.

"My guess is it will be progressive during the course of the year."

But he said the short-term outlook was "somewhat cloudy".

Mr Hockridge's comments came as QR National unveiled a 22 per cent rise in net profit to $440.9 million in the year to June 30, from $360.9 million in 2010/11.

It also released its annual report, revealing Mr Hockridge received a $3.24 million pay packet in fiscal 2012, including $1.5 million in short-term bonuses.

QR National announced it would undertake an on-market buyback of up to 10 per cent of its shares within the coming 12 months.

Mr Hockridge said the buyback was not designed to support the stock in case the Queensland government sold its stake later in the year.

"No... I'm sure they'll let everybody know when they consider it to be the right time," he said.

The Queensland government still holds a stake of about 34 per cent in QR National following its stock market float in 2010.

Given the float, its profit result for 2011/12 included a one-off tax benefit of $281 million.

QR National's preferred measure of profitability, underlying earnings before interest and tax, rose to $584 million from $383 million.

Morningstar analyst James Cooper said the company seemed to be well managed and it could look forward to growth as it continued to reduce costs amid lower commodity prices.

"There's still so much cost that they can take out and that almost guarantees some profit growth over the next few years even though the macro outlook is a little bit shaky," Mr Cooper said.

With the company's strong balance sheet, the share buyback was a logical move, he said.

QR National shares closed eight cents, or 2.3 per cent, higher at $3.55.

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