REPORTING SEASON: Aurizon Holdings Ltd (AZJ)

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Figure 1: Aurizon Holdings Ltd 12 month chart

 

Aurizon (AZJ) reported a strong lift in profit but it did come at a cost.

 Aurizon Holdings Limited (AZJ) reported a solid result with revenue basically flat at $1.96 billion and earnings and EBIT margins improving. AZJ’s EBIT margin lifted to 24.7% showing that AZJ is on track to meet its FY15 guidance of maintaining an EBIT margin of 25% for the year.

 AZJ Total freight volumes increased by 1%. It hauled 1% fewer tons of coal during the half, while iron-ore volumes were down 14% and intermodal volumes and revenue also fell.

 CAPEX and cost cutting are still a major priority for Aurizon it has already flagged reductions in its fleet and staff. Savings already logged in FY15 are $69 million as well as a $40m from the sale of its Queensland maintenance facilities. AZJ’s CAPEX over the half was $552million, slightly below market expectations. Staff redundancy costs reached $13 million as total staff numbers fell to 6,977 by year end. The cost to Aurizon of its share buyback so far has totalled $60 million after purchasing 13.4 million shares.

 AZJ said “its transformation program has delivered benefits for the 18 months until the end of December 2014 of $198m, in line with its target of $250 to $300 million by 30 June 2015.”

 Aurizon reaffirmed its current coal haulage outlook for FY2015 in the range of 210 – 220 million tons and it expects iron ore tonnages to be around 23 million tons for FY2015.

 AZJ will pay a $0.101 interim dividend to shareholders on 23 March 2015.

 

You can see all of CommSec’s reporting season analysis by clicking here.

Juliana Roadley, Market Analyst,