The company credits the result from improved Ebit performance - up $A 29.3m in the Network (below-rail) business following increased revenues from the recently approved UT5 access undertaking, combined with strong performance by its Bulk business where new contracts and operational efficiencies resulted in a Ebit increase of $A 29.5m.
Aurizon recorded a statutory net profit after tax for the six months of $A 269m, a 19% increase compared with the first half of 2018-19. The company says that with solid operational and financial performance during the half, it is re-confirming its Ebit guidance of $A 880-930m for the full financial year.
Following the implementation of a new legal and capital structure for the company, ratings agencies confirm credit ratings for both Operations and Network at BBB+/Baa1 with thresholds that imply an additional $A 1.2bn in funding capacity is available.
During the half, Aurizon completed $A 215m of the $A 300m on-market share buy-back announced in August 2019 and confirmed that it has increased the buy-back offer to $A 400m.
Projected shortfall
A total of 106.3 million tonnes of coal was transported in Queensland and New South Wales in the six months to December 31 2019. This was on a par with the previous comparable period although a projected shortfall has resulted in a revision of expected volumes for 2019-20 to around 210-220 million tonnes.
Aurizon’s Network business, which provides infrastructure access across the Central Queensland Coal Network, saw a total of 116.6 million tonnes of traffic in the period, which is again comparable to same period in 2018.
Questioned by the media on the entry of, soon to be renamed, Genesee & Wyoming Australia into the Queensland coal market, Aurizon CEO Andrew Harding said he is not concerned about increased competition.
“We've been expecting entrants into the market for some years,” Harding says. “It's built into the drivers behind our strategy. It's just part of doing business and we expected it to happen, and it looks like it is happening.”
