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Asciano says times and share price tough

Ports and rail operator Asciano has told shareholders that it is operating in a tough economic environment and it is frustrated by its disappointing share price performance.

Investors were told at the company's annual general meeting in Sydney that it was dealing with muted consumer driven volumes in its rail freight business, constant speculation about coal demand and ongoing challenges in the global container shipping industry.

However, chief executive John Mullen said Asciano was well positioned to deliver another year of solid earnings growth and to continue to deliver on its ambitious financial targets.

Asciano had a good year, lifting its profit for the 12 months to June 30 by 43 per cent to $242.7 million.

However its share price is languishing at $4.24, down six per cent for the year and - more worryingly for investors - down 83 per cent from the $24-$25 it listed at in 2007.

Mr Mullen said weak market conditions were not expected to improve in the short term in its terminals and logistics business, although there seemed to be some pick-up in volume in the current quarter.

"We do remain disappointed that our share price has not reflected the improvements in performance being made by the company," he said.

"This is as frustrating to us as I am sure it is to shareholders, but all we can do in such an environment is to continue to deliver on our shareholder return targets and ultimately the value being created will surely have to flow through to appreciation in our share price as well."

The company was focussed on delivering productivity growth and operational improvement, including pushing on with controversial plans to move to full automation of a terminal at Port Botany by mid-2014.

"While escalating labour costs and industrial activity remain difficult in this current environment, in particular in our Terminal and Logistics business, we are actively managing these issues and are focused on building a productive relationship with all employees across the Asciano Group," Mr Mullen said at the AGM.

On Thursday, Asciano released a strong volume performance for the September quarter - the first of the financial year.

Kilometres covered and tonnes hauled in its Pacific Coal business improved by about nine per cent despite a weak coal market, due to existing contracts.

There was also improvements in its rail and stevedoring business but a fall in the terminal and logistics business.