REPORTING SEASON: Aurizon Holdings Ltd (AZJ)

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Figure 1: Aurizon Holdings Ltd 12 month chart

 

Profit falls as write-downs leave their mark

·         Rail freight operator Aurizon announced a 43% fall in Net Profit After tax (NPAT). The result was driven by previously announced asset write-downs or impairment charges, against its rolling stock which totalled $317 million, in addition to redundancy costs of $69 million.

·         Removing the impact of these one-off events, underlying profit rose by almost 7.5% to $523 million. Underlying earnings before interest & tax (EBIT) rose by 13% to $851 million however this was below the markets expectations of $876 million.

·         AZJ said that based on current market conditions the outlook for 2015 includes coal haulage volumes to be in a range of 210-220mt. A decrease in contracted volumes for iron ore from 30million tonnes in FY2014 to approximately 23million tonnes in FY2015 is expected and freight volumes are expected to see a modest increase in the range of 4%. Furthermore the potential for industrial action looms as a hurdle for AZJ as the group negotiates Enterprise Bargaining Agreements.

·         AZJ declared an unfranked final dividend of 8.5 cents per share, payable on 22nd of September 2014, with a record date of the 2nd September 2014.

 

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Tom Piotrowski, Market Analyst,