Aurizon (AZJ) H2 2025 earnings summary

Executive summary

• Underlying earnings for FY 2025 decreased by 3% to $1.576 billion, impacted by deferred network revenue and increased provisions for three bulk customers; underlying NPAT fell 14% year-over-year.

• Group EBITDA would have been over $100 million higher excluding these items; deferred network earnings are expected to be recovered in FY 2027.

• A new $150 million on-market buyback was announced, following a $300 million buyback last year.

• The payout ratio was maintained at 80% with a fully franked dividend of $0.65 per share; full-year dividends decreased 8% to 15.7cps.

• Significant contract wins in bulk, including a 15-year BHP copper contract expected to deliver $1.5 billion in revenue over 10 years.

Financial highlights

• Revenue increased by 3% to $3,952 million, driven by coal, bulk, and containerized freight; network revenue was flat.

• Statutory EBITDA was $43 million lower than underlying due to significant items, including a $57 million non-cash impairment in bulk, $37 million legal settlements, and $23 million transformation costs.

• Free cash flow was 22% lower year-over-year but up 19% in the second half; $30 million of network take-or-pay to be received in early FY 2026.

• Total CapEx for the year was $695 million, a 17% reduction from the prior period, with majority allocated to Network.

• EBITDA margin dropped to 39.9% from 42.2% year-over-year.

Outlook and guidance

• FY 2026 group underlying EBITDA expected in the range of $1.68–$1.75 billion.

• Dividend guidance for FY 2026 is $0.19–$0.20 per share.

• Sustaining CapEx forecast at $610–$660 million; growth CapEx at $100–$150 million.

• Network, coal, bulk, and containerized freight earnings all expected to be higher in FY 2026, barring major disruptions.

• Cost-out program identified $60 million in annualized savings, with full benefit from July 2025.