Aurizon (AZJ) H2 2024 earnings summary

Executive summary

• FY2024 underlying EBITDA rose 14% to $1,624 million, within guidance, with growth across Network, Coal, and Bulk segments, and a strong uplift in earnings supported by volume growth and improved customer mix.

• Statutory NPAT increased 25% year-over-year to $406 million; underlying NPAT up 11%.

• Free cash flow surged 123% to $661 million, enabling a dividend payout ratio increase to 80% and the announcement of a $150 million on-market buyback.

• 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.

• Achieved strong safety improvements: TRIFR down 15%, SIFR(a+p) down 29%.

Financial highlights

• Revenue increased 9% to $3,844 million, driven by Network regulated revenue, higher coal volumes/yield, and Bulk minerals/iron ore.

• Underlying EBITDA rose 14% to $1,624 million, with all business units contributing to growth.

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

• EPS rose 11% to 22.1 cents per share.

• Net debt/EBITDA improved from 3.5x to 3.0x.

Outlook and guidance

• FY2025 underlying EBITDA expected in the range of $1,660 million–$1,740 million.

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

• Network EBITDA projected to rise on higher regulated revenue; Coal EBITDA to remain stable as higher volumes are offset by lower yield and higher costs; Bulk EBITDA to increase, led by Bulk Central volume growth.

• No major supply chain disruptions assumed in FY2025 guidance.

• Containerized freight expected to contribute neutral EBITDA.