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Aurizon boosts profit, announces $300m share buyback

Business

Freight and logistics company Aurizon has reported an underlying profit before tax of $909 million, a 10 per cent increase on last year but added a note of caution for the year ahead.

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While there was no impact on its coal haulage volumes in 2020, Aurizon said the current year result to be in the range of $830 million to $880 million, well down on last year’s result because of “recessionary impacts”.

Managing director Andrew Harding said the company expected a softer first half on the back of lower demand in while there was likely to be a pick up in the second half.

He said India’s steel sector was already showing signs of recovery.

The Brisbane based company also announced a $300 million buyback after completing a $400 million buyback last financial year.

Aurizon said the higher earnings before interest and tax resulted from an increase in revenue because of the UT5 rail access undertaking and a strong performance from its bulk goods business.

Aurizon will pay out a dividend of 13.7 cents a share, 70 per cent franked. This gave shareholders a full year dividend of 27.4 cents.

Harding said despite the emergence of COVID-19 in the second half of FY2020, Aurizon delivered a solid operational
and financial performance with no material impact as a result of the pandemic.

He said the company had made strong progress its priority areas of the access undertaking which sets parameters on how much it can earn as a monopoly provider of its rail services.

Harding said it had substantially de-risked the rail haulage contract book by winning new contracts and extending the length of
a number of existing contracts in the coal and bulk businesses.

The bulk business had also shown a turnaround of the operational and financial performance.

Aurizon had also refinanced its debt and now has more than $1.1 billion of available liquidity.

The coal business delivered 214 million tonnes of coal for customers during 2020, which is broadly in line with 2019. It achieved EBIT of $411 million, a decrease of 1 per cent against 2019.

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