Spirit ferries, terminals have millions wiped in major asset write-down

The operator of the Spirit of Tasmania ferries has announced a $723 million accounting loss for the year, but insists the state-owned company's outlook is "very strong".

The bulk of TT-Line's accounting loss in 2025–26 relates to a $646.9 million write-down of assets, including its four ferries and two terminals.

A write-down is when an asset is reassessed as having a lower value to the company than what it was listed on the balance sheet as.

"I'm not seeking to suggest that's not significant,"

TT-Line chairman Ken Kanofski said.

"But it is non-cash, and it has no impact on our equity ask. It has no impact on our debt position.

"And to that extent, it's really the accounting catching up with all the issues that have been well publicised for some time now."

In May, it was revealed the company's much-maligned ferry replacement program had cost $717 million more than originally expected.

In the same month, the government announced a $506 million equity injection into TT-Line, and later increased the company's borrowing limit by $410 million.

The new write-downs include:

• Spirit of Tasmania I and II — from $174.3 million to $87.5 million
• Spirit of Tasmania IV and V — from $1.086 billion to $717.9 million
• Devonport terminal — from $416.8 million to $282.8 million
• Geelong terminal — from $311 million to $262.1 million

Like new car leaving showroom, chairman says

Spirit I made its final voyage across Bass Strait on Thursday, and Spirit II will do the same on Friday evening.

Mr Kanofski said several parties were interested in buying either one or both vessels.

He said the significant write-downs for the older ships reflected decreased demand from buyers due to unrest in the Middle East, higher interest rates and the type of fuel the ships use.

For the new ships, which begin servicing Bass Strait at the end of the month, Mr Kanofski likened their write-downs to the reduced value of a new car once it leaves the showroom.

He also downplayed the revaluations of the Devonport and Geelong terminals.

"Of course it's material, but it doesn't change anything," he said.

"So we're not asking for more equity. It doesn't change the way we're going to trade.

"We're not asking for more debt, so it doesn't change the fundamentals of the business."

Mr Kanofski said TT-Line had recorded a $1.5 million operating profit last financial year.

While acknowledging the company still faced financial challenges, he insisted it was in good shape for the future.

"I think the outlook is very strong," he said.

"I mean, the reality is we've now got very, very good assets.

"They're all brand new, the berths are brand new, the ships are brand new.

"It's not unusual early in the life of large-scale infrastructure for the returns to be less than what you would hope for."

He said the company's lender, TasCorp, and state Treasurer Eric Abetz had also approved changes to the dates its debt repayments were due.

"We've been solvent at all times, and we remain that way," Mr Kanofski said.