Bottom line boost in Aurizon interims


Net profits up 52 per cent on previous first half

Bottom line boost in Aurizon interims
Aurizon is yet to fully shake off its intermodal business

 

Aurizon has seen its net profit after tax (NPAT) rise by half compared with the first half last financial year.

The rail company, which is leaving intermodal operations to focus on mining, gained $281.5 million for the six months of the financial year, up from $185.8 million last time around.

"The change is a result of the $156 million of impairments and significant items that were recognised in the prior period," the company says.

MD and CEO Andrew Harding lays responsibility for the early outcome down to changes put in place last year.

"The loss-making Intermodal Interstate business was closed as planned in December 2017; we are on track to deliver on our three-year transformation target of $380 million; and we are 75% complete with the $300 million buyback, and will complete the balance by June," Harding tells shareholders.

"We have returned $688 million to shareholders since January 2017, and the Board announced an interim dividend today of 14.0 cents per share from the Company’s continuing operations.

"We are realising improved operational and customer service performance through our simplified business unit structure that came into effect in July, together with relocation of more roles in our very capable workforce to regional hubs.

"Continuing the momentum of continuous improvement is fundamental to delivering on our FY2018 targets."

That said, the total intermodal withdrawal process , which cost $77 million during the first half, still has some way to go and the company is concerned that a successful outcome may be hindered by the Queensland Competition Authority (QCA) and Australian Competition and Consumer Commission (ACCC).

The costs included:

  • contract, lease and supplier exit costs of $60m
  • redundancy provisions  of $12m
  • asset write offs of $5m.

These are to be mostly paid in the second half, and more cash is expected the sale of its Forrestfield terminal.

"The closure and divestment of the Intermodal business is being progressed," the company says.

"The Intermodal Interstate business was closed as planned at the end of 2017, and surplus locomotives as well as experienced employees have transferred to the growing NSW Coal business.

"Subject to regulatory approval, we are targeting closure of the transactions for the sale of the Queensland Intermodal business and the Acacia Ridge Freight Terminal on, or around, 30 June 2018.

"If we are not able to gain ACCC approval for the transaction Aurizon will close the Queensland Intermodal business, as we have done with the Interstate business, and potentially impacting up to 350 jobs."

 

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