Aurizon H1 profit slides

Group lifts FY haulage expectations, almost doubles interim dividend.

Aurizon Holdings (AZJ) has posted a slide in first-half profit, hit by impairment charges, as strong coal haluages in January and February led the miner to lift its full-year haulage expectations.

In the six months to December 31, Aurizon posted a net profit of $107.3 million, a 39% slide on the $175.7 million in the first half of 2013.

One-off impairments weighed on Aurizon's results, including charges of $147 million on its rollingstock fleet and $50 million on a strategic infrastructure projects review, as well $25 million in the payment of voluntary redundancies.

In the period, there were 262 voluntary redundancies which the group expects to deliver an expected $28 million in savings during fiscal 2014 and $42 million during the following full year.

Underlying net profit was $263 million, an 18 per cent increase on the $222 booked in the previous corresponding period.

In the same period revenue was $1.965 billion, a 5% lift on the previous corresponding period's $1.879 billion.

The group will pay an interim dividend of eight cents, almost double the previous interim dividend of 4.1  cents.

The dividend will be 80% franked and will paid on March 28 to shareholders on the register at March 5.

Aurizon chief executive officer Lance Hockridge said the result reinforced the traction the group's transformation program is getting, and confirmed Aurizon remained on track to meet its operating ratio target of 75% in fiscal 2015.

"Aurizon is driving out costs and lifting productivity across operations in a persistently challenging economic environment where resource investment has moderated and general freight activity remains flat," he said.

Aurizon said its view on the medium to long term macroeconomic environment remained positive, but noted short-term headwinds in the domestic economy continued to be challenging.

Mr Hockridge said the company now expected to shift between 207 and 212 million tonnes of coal during the 2014 financial year, which is up from the previous guidance of between 200 and 205 million tonnes.

He said the company would continue to focus on reducing costs during the second half.

"Aurizon will continue to maintain the intensity of work on transformation and reform initiatives to reduce costs, lift productivity and deliver improved customer service levels," he said.

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