Aurizon mining exposure drives half year loss


Intermodal doesn’t help as rail and logistics firm takes $345m hit due to impairments

Aurizon mining exposure drives half year loss
Intermodal failed to lift Aurizon’s half-year results.

 

The market pain miners are feeling has been passed on to rail and logistics company Aurizon, its interim results show.

Despite an underlying net profit after tax of $237 million, down 23 per cent on the previous year’s first half of $308 million, impairment charges brought that down to a statutory $108 million loss.

"Our underlying business is strong and resilient but we need to respond rapidly in a very challenging business environment for our customers," CEO Lance Hockridge says.

"Cost reduction and transformation will remain the key drivers of margin growth and shareholder value creation, and we’re determined to pull every cost and efficiency lever available to us."

"While conditions in the Queensland Intermodal market are soft, Aurizon has seen solid growth in the Melbourne to Brisbane route and has maintained volumes between Melbourne and Perth despite a weak outlook in the Western Australian market."

A $2 million decrease in intermodal sector revenues reflecting the expiry of a key customer contract and a 1 per cent reduction in containers, measured as twenty-foot equivalent units (TEU).

"Supermarket retailers provided volume growth in the intermodal market in 1H FY2016, and Aurizon’s focus on safety and customers was recognised by being awarded the prestigious ‘Carrier of the Year’ Award at the annual Woolworths customer awards in its first year of service to the customer," the company notes.

"Aurizon signed a heads of agreement with NSW Ports to operate the Enfield Intermodal Logistics Centre in Western Sydney and lease the land at the site from March 2016, enabling Aurizon to accelerate growth plans for the intermodal freight business.

"The new site will allow Aurizon to run longer trains, improve scheduling and cycle times and also reduce shunting as well as provide an opportunity to expand into the import-export market with potential for services from Port Botany."

 

Intermodal failed to lift Aurizon’s half-year results.

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