Aurizon drops after first-half profit drop, weaker guidance
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More news: Shares in Aurizon Holdings are down nearly 2% to $3.13 after Australia’s top rail freight operator reported a dip in first-half profit and lowered its full-year earnings expectations.
"Overall, the 1H25 result was disappointing almost entirely due to weakness in Bulk earnings. The outlook confirms expectations for lower end of existing guidance, however similarly pointing to lower end of the capex ranges may provide some cushion to free cash flow expectations, as might the additional $50m buyback," UBS analysts said in a note.
Aurizon sees lower FY earnings, expands share buyback
The news: Australia’s top rail freight operator Aurizon expects full-year earnings to be at the lower end of its guidance following a dip in first-half profit, and expanded its share buyback by another $50 million.
The numbers: Net profit for the six months to December was down 2% to $233 million. Underlying earnings were down 4% to $814 million as Network earnings was offset by falls in the Coal and Bulk divisions. Revenue increased 3% to $2.02 billion and the company will pay an interim dividend of 9.2 cents a share, down from 9.7 cents a year earlier.
It also announced a $50 million extension to its ongoing share buyback, taking it to a total of $300 million.
The context: Aurizon’s earnings from coal transport were down, as volume growth was offset by a lower yield due to customer mix and higher operating costs. Bulk earnings were also lower due to lower grain railings, a derailment in Western Australia and higher doubtful debt provisions. Managing Director & CEO Andrew Harding said the two largest business units — network and coal — were both performing “solidly and broadly in-line with expectations” in the first half.
Aurizon maintained its underlying earnings guidance of $1.66 billion to $1.74 billion for the full year, but now expects earnings to be at the lower end of the range.
The source: ASX
