Derailment, heavy rains cause havoc for Aurizon
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 pre-tax 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 expected to haul this financial year to between 192 million and 195 million tonnes. It has 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¢ previously.
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 Wednesday night after a 26-day outage.
Aurizon expects the bill for repair work to tracks to cost as much as $15 million, most of which it hopes to recoup.
It also expects a $22 million hit to pre-tax earnings from lost coal volumes due to the floods, and a further $5 million shaved from earnings due to the train derailment.
Aurizon chief executive Lance Hockridge said the recent heavy rain was different to the major floods in Queensland in 2011 because it had not impacted on 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 confirmed that Aurizon had 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, and 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.