Aurizon beats expectations, unveils $300 million buyback
Rail freight operator Aurizon has beaten market expectations to deliver a full-year underlying profit of $531 million and will reward shareholders with a higher dividend and $300 million share buyback.
The group, which mainly transports commodities produced by the mining industry, lifted its underlying profit by 12 per cent, citing new contracts, solid tonnages in its coal and network business and no significant impact on its volumes from COVID-19.
Underlying EBIT (earnings before interest and tax) rose 10 per cent on the previous year to $909 million, which was comfortably ahead of Bloomberg's market consensus of $894.1 million. At its half-year results in February, the company maintained its underlying EBIT guidance for the full financial year of between $880 million to $930 million.
"Despite the emergence of COVID-19 in the second half of financial year 2020, the company has delivered a solid operational and financial performance with no material impact as a result of the pandemic," said chief executive Andrew Harding.
The company's statutory profit rose 28 per cent to $605 million for the year, which included the sale of the group's rail grinding business. Total revenue rose 5 per cent to $3.065 billion.
Aurizon will pay a final dividend of 13.7 cents, 70 per cent franked, on September 21. This is up on last year's final dividend of 12.4 cents.
However, the company forecast a lower EBIT for the new financial year, in the range of $830 million-$880 million. It based this partly on flat volumes for coal transport for the year ahead, in the range of 210-220 million tonnes, due to the expected impact of COVID-19 on world demand for steel.
Shares closed up 0.7 per cent on Friday at $4.55.