KiwiRail has posted an annual loss but its performance is well up on the previous year.
The state-owned rail operator lost $167 million for the year to the end of June, an improvement of 33 percent.
It said the loss reflected the writedown of its rail assets, and the fact the rail network did not generate enough money to cover the level of investment required.
Revenue fell 3 percent to $721m, led by reduced coal volumes from Solid Energy, which offset higher patronage on the Interislander and its long-distance train services.
It also cut its costs, helped in part by lower fuel prices.
The company is considering selling more assets, including Wellington's central railway station.