Aurizon shares dip after slower bulk volumes
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More news: Shares in Aurizon Holdings are down more than 2% to $3.39 in early trading after Australia’s top rail freight operator reaffirmed full-year earnings will be lower than last year.
Aurizon reported growth in coal volume traffic in New South Wales and southeast Queensland, although this remained flat in other areas. Meanwhile, bulk volumes in the first four months dropped due to lower bauxite/alumina and grain railings in Western Australia.
Aurizon reaffirms FY guidance, expands share buyback by $100m
The news: Australia’s top rail freight operator Aurizon has reaffirmed full-year earnings guidance after solid trading year-to-date and expanded its share buyback program by another $100 million.
The numbers: Coal volumes in the four months to 31 October were 65.5 million tonnes (mt), 3.7mt higher from a year ago, while volumes on the Central Queensland Coal Network were 2.6mt higher at 73.6mt.
However, bulk volumes in the first four months were down 4.5mt to 18.2mt, mainly due to lower bauxite/alumina and grain railings in Western Australia, it said. Containerised freight jumped 23.4 twenty foot equivalent units (TEU) to 71.3 TEUs.
The context: Aurizon said it would extend the company’s $150 million share buyback announced in August by another $100 million, following the solid cash flows year-to-date and the existing credit thresholds.
The company said based on the outlook by the Grain Industry Association of Western Australia, it estimates an increase of 20% in the grain harvest for the 2024-25 season, while stronger Bulk volumes and earnings are expected in the second half of FY25.
It has reaffirmed full-year guidance for earnings in the range of $1.66 billion to $1.74 billion, although this is likely to be below last year’s figures.
The source: ASX announcement
