First Impression: Aurizon Holdings (AZJ)

Bell Potter

Underlying EBIT: Below Rail (Network) up 20% $295m; Above Rail up 18% to $219m. | Net operating cash flow up 19.7% to $625m. | 1HFY2017 Operating ratio 72.6% as compared to 77.6% in pcp. | $64m of benefits delivered, $195m since 1 July 2015; on track to achieve $380m three-year target (cost reductions and efficiency improvements) –Transformation program extended beyond FY18. | Outlook: “The Company has confirmed its previous guidance for FY2017 Underlying EBIT, which is expected to range between $900-950 million. The forecast for total above rail volumes remains between 255-275 million tonnes, with the coal haulage forecast at 200-212 million tonnes. The outlook is contingent on no material deterioration in the trading environment for customers and no major weather impacts.” | Today’s share price reaction: Up 5% to $5.46 (10.56 am).


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