The publicly-owned KiwiRail has lifted its half-year profit due to business acquisitions and government grants.
The rail operator made a profit of $125.6 million in the six months to December, an increase of 39% on the same period a year earlier.
But KiwiRail says the accounting rules means the profit includes capital grants for work on Auckland and Wellington rail networks, which added nearly $95 million.
It says actual revenue fell due to lower volumes of goods being shifted due to to economic downturn, while costs rose due to higher depreciation expenses.
KiwiRail lowered its forecast full-year profit to $305 million.
Meanwhile, the Government is reviewing its investment in KiwiRail to determine whether it should spend hundreds of millions of dollars more on upgrades.
Questions about the future of KiwiRail are included in the National Infrastructure Plan released on Tuesday by the Finance Minister, Bill English.
It warns the Government is likely to have to give more money to KiwiRail to keep it going.
Mr English says he is not entirely convinced but the Government is considering the options.
