Aurizon cuts haulage forecast
AUSTRALIA'S largest listed rail company, Aurizon, has suffered one of its sharpest one-day falls since it was floated more than two years ago, after its half-year earnings failed to meet market expectations.
The company formerly known as QR National posted a 36 per cent rise in underlying profit to $356 million for the half, which was lower than analysts' forecasts.
Shares in Aurizon fell more than 6 per cent, or 26¢, to $3.95 on Wednesday.
Aurizon also lowered its forecasts for the amount of coal it expects to haul this financial year to between 192 million tonnes and 195 million tonnes. It had previously targeted 195 million to 205 million tonnes.
The company blamed the reduced forecast on heavy rains and flooding in its home state of Queensland last month, and a costly train derailment.
Aurizon posted a net profit of $176 million for the first half, down from $196 million previously. The bottom line result included $61 million in payments for redundancies.
It will pay an interim dividend of 4.1¢ a share on March 27, up from 3.7¢.
Last month, heavy rains and flooding from cyclone Oswald affected rail networks in central Queensland, including the Blackwater and Moura coal systems.
The large Blackwater system was cleared for trains to operate earlier this month after a 12-day shutdown, but more recently suffered four days of disruption caused by a derailment. The Moura system was reopened on Tuesday night after a 26-day outage.
Aurizon expects the bill for track repairs to cost as much as $15 million, most of which it hopes to recoup. It also expects a $22 million hit to pretax earnings from lost coal volumes owing to the floods, and a further $5 million shaved from earnings because of the train derailment.
The chief executive, Lance Hockridge, said the recent rains were different from the 2011 Queensland floods because they had not affected customers' ability to mine coal. Significant stockpiles of coal remained at mine sites and the challenge for Aurizon would be to recover the "lost tonnages" over the rest of the financial year.
Mr Hockridge also said there was scope to pursue some targeted redundancies later this year.
The company has reduced its workforce by about 1600 over the past two years through voluntary redundancy programs. A large proportion of the jobs cut have been from its coal-haulage business. The cuts include support-services roles and train drivers.
Aurizon is just weeks away from appointing a new chief financial officer. Keith Neate, a former CFO at Virgin Australia, has been acting in the role at Aurizon.