Aurizon Holdings posted a lower than expected profit after tax for the 2017 financial year. Aurizon’s underlying performance was impacted by Cyclone Debbie & weak demand for regular freight.
AJZ’s below rail revenue lifted by 7% to $1.3 billion despite the impact of cyclone Debbie. The lift in rail revenue was a result of strong operational performance of its rail infrastructure and track management, with cancellations due to upgrades and regular maintenance at 1.2%, which was below the five year average of 1.7%.
Underlying EBIT fell by 4% to $836 million due to the impact of Cyclone Debbie, this was in line with expectations as the company had already given target guidance prior to the full year release.
AZJ posted a Statutory Net Loss after Tax of $188 million. This was a result of a hit from one-off impairments in its Bulk and Intermodal businesses totalling $927 million.
Aurizon released outcomes of its freight review announcing it would sell two components of the Intermodal business (Acacia Ridge and Queensland business) and close the third intermodal freight business (Interstate). Intermodal is the use of two modes of freight, such as truck and rail, to transport goods. The decision to exit means that Aurizon can refocus on core heavy haulage and rail infrastructure businesses. Aurizon is selling its Queensland Intermodal business to Linfox and selling its Acacia Ridge Intermodal Terminal to Pacific National, for $220 million. These sales will impact approximately 250 employees due to the closure of the interstate business.
Aurizon’s coal freight business is showing signs of improving with stronger commodity prices and a lift in Australian export volumes, picking up after the cyclone impact has passed. Aurizon expects to haul between 215 million and 225 million tons of coal in FY18.
Today Aurizon announced plans to buy around $300 million in shares (on market) using surplus capital from its recent asset sales. AZJ will pay a final dividend of $0.089 on 25 September 2017.
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