Aurizon Holdings Limited

FY 2026 group revenue was $4.2 billion, up 6%. Underlying EBITDA was $1.7 billion, up 9% or $148 million; NPAT was $433 million, up 24%; and EPS increased 29%. Underlying free cash flow rose 11%. Statutory EBITDA was $1.62 billion, and statutory NPAT was $362 million. Network EBITDA increased 8% to $1.03 billion; Bulk EBITDA increased 38% to $233 million; Coal EBITDA increased by $13 million; and cash and undrawn facilities at 30 June were $1.1 billion, with net debt of $5.2 billion and gearing of 57%. The Board declared a final dividend of $0.105 per share franked at 90%, taking full-year dividends to $0.23 per share, and the company completed its $250 million on-market buyback at an average price of $3.72. For FY 2027, underlying EBITDA is guided to $1.725 billion-$1.775 billion; dividends to $0.23-$0.24 per share; non-growth CapEx to $590 million-$660 million, including $25 million of transformation capital; and growth CapEx to $70 million-$120 million. Management expects network earnings to be higher, coal earnings lower, bulk earnings higher, and other earnings higher with containerized freight breakeven on an EBITDA basis.

Andrew Harding struck an optimistic but disciplined tone, framing Aurizon as a long-duration infrastructure business with strong cash generation, contractual and regulatory protection, and capital returns. He highlighted strategic progress in UT5+, coal recontracting, bulk growth, and entry into vehicle logistics, and said the business is drawing freight from road to rail. He also emphasized safety investments, including the TrainGuard rollout across 2,000 kilometers and more than 100 electric locomotives.

Ian Wells focused on the quality of the financial performance and the mechanics behind it. He cited EBITDA of $1.7 billion, revenue of $4.2 billion, underlying free cash flow up 11%, ROIC of 9.5%, net debt of $5.2 billion, liquidity of $1.1 billion, interest hedged to 95%, and investment-grade ratings of BBB+ / Baa1. He also explained the $27 million network revenue timing benefit, the $54 million noncash impairment in NSW coal assets, and a $20 million ERP/redunancy charge, while reiterating confidence in the balance sheet and in funding future maturities.

Analysts focused heavily on coal recontracting, the effect of customers rightsizing volumes, and whether weaker contracted volumes meant lower yield for several years. Management said the recent 60 million tonnes of recontracting had not led to a material rate deterioration, but that FY 2027 coal earnings would still fall because contracted capacity is lower even if hauled volumes are broadly flat. Questions also probed containerized freight breakeven and whether the improvement needed in FY 2027 is larger than FY 2026; management said yes, because full-year CEVA volumes, Kewdale efficiencies, and fewer outage disruptions should all help. There were also clarifications on the buyback decision, the debt refinancing profile, and the nature of the impairment and transformation costs.