Aurizon (AZJ) H2 2024 earnings summary

Executive summary

• FY 2024 EBITDA rose 14% to AUD 1.624 billion, with growth across Network, Coal, and Bulk segments, supported by volume growth and improved customer mix.

• Net profit after tax increased 11% to AUD 406 million, with free cash flow up 123% to AUD 661 million.

• Dividend payout ratio lifted to 80% of NPAT, with a final dividend of AUD 0.073 per share, 60% franked.

• Announced up to AUD 150 million on-market buyback and increased shareholder returns.

• Strategic investments in bulk and containerized freight, including the Tarcoola to Darwin rail line and national interstate containerized freight network, are positioning the business for future growth.

Financial highlights

• Revenue grew 9% to AUD 3.844 billion, driven by Network regulated revenue, higher coal volumes/yield, and Bulk minerals/iron ore.

• Underlying EBITDA rose 14% to AUD 1.62 billion, with all business units contributing to growth.

• EBIT increased 20% to AUD 917 million; EPS up 11% to 22.1c.

• Free cash flow (excluding growth CapEx) was AUD 661 million, materially higher year-over-year.

• Group net debt reduced to AUD 4.8 billion, with net debt to EBITDA at 3x, down from 3.5x.

Outlook and guidance

• FY 2025 underlying EBITDA expected in the range of AUD 1.66–1.74 billion.

• Sustaining CapEx forecast at AUD 640–720 million (including AUD 80 million transformation capital); growth CapEx at AUD 125–175 million.

• Network earnings to benefit from increased regulated revenue, offset by lower external construction works; no volume-related over-recovery assumed.

• Coal earnings expected to be broadly consistent with FY 2024, with higher volumes offset by lower yield and higher costs.

• Bulk earnings projected to rise, driven by Bulk Central volume growth, offsetting declines in Bulk West.

• No major supply chain disruptions assumed in guidance.