Aurizon Holdings Limited

FY 2026 group revenue was $4.2 billion, up 6%. Underlying EBITDA increased 9% to $1.7 billion, or $148 million higher year over year; statutory EBITDA was $1.62 billion. Underlying NPAT rose 24% to $433 million, while statutory NPAT was $362 million, down $71 million versus underlying due to reconciliation items. Underlying free cash flow increased 11%, and ROIC improved to 9.5%. Network underlying EBITDA increased 8% to $1.03 billion; Bulk underlying EBITDA increased 38% to $233 million; Coal EBITDA increased $13 million; and containerized freight transport revenue rose 32% to $150 million, though it was not yet breakeven. The Board declared a final dividend of $0.105 per share, bringing full-year dividends to $0.23 per share, and the company completed the $250 million on-market buyback at an average price of $3.72. For FY 2027, Aurizon guided to group underlying EBITDA of $1.725 billion to $1.775 billion, full-year dividends of $0.23 to $0.24 per share, non-growth CapEx of $590 million to $660 million including $25 million of transformation capital, and growth CapEx of $70 million to $120 million. Management said network earnings should be higher, coal earnings lower, bulk earnings higher, and other earnings higher with containerized freight expected to break even on an EBITDA basis.

Andrew Harding emphasized Aurizon’s long-term infrastructure profile, pointing to strategically significant rail assets, contractual and regulatory support, and a diversified portfolio. His tone was upbeat and confident, with repeated emphasis on execution across network, coal, bulk, and containerized freight, plus strategic priorities like UT5+, coal recontracting, bulk growth, and vehicle logistics. He also framed the business as resilient and cash generative, highlighting more than $1.8 billion returned to shareholders over four years.

Ian Wells focused on the strength and consistency of cash generation and capital discipline. He cited $1.7 billion of EBITDA, $718 million of combined sustaining and growth capital, $1.1 billion of available liquidity, $5.2 billion of net debt, group gearing of 57%, and net debt to EBITDA of 3x; he also noted interest costs are hedged to 95% and ratings remain BBB+/Baa1. He said free cash flow to equity supports shareholder returns, and that dividends should remain near the top end of the 70% to 100% payout policy as capital intensity normalizes.

Analysts pressed on coal recontracting, especially whether BMA nominations had changed, how intense competition was, and whether recent contract signings imply yield pressure beyond FY 2027. Management said it had not seen a material change in freight rates or deterioration in recent recontracting, while also stressing that future outcomes will depend on the remaining contract cycle. Questions on containerized freight focused on why the business still missed breakeven despite 25% TEU growth; management explained FY 2026 was hit by cross-river rail closures, track outages, and startup costs, while FY 2027 should benefit from full CEVA volumes, Kewdale efficiencies, and fewer outage disruptions. There was also discussion of the debt maturity tower, with management saying it will refinance in advance, expects current rates to be higher, but sees the regulatory framework as a partial hedge.