Each year, the Company transports more than 250 million tonnes of Australian commodities, connecting miners, primary producers, and industry with international and domestic markets. It provides customers with integrated freight and logistics solutions across an extensive national rail and road network, traversing Australia.
We operate a coal network made up of approximately 2,670 kilometres of heavy haul rail infrastructure in Central Queensland. We also provide a range of specialist services in rail design, engineering, construction, management and maintenance, that offers large-scale supply chain solutions to a diverse range of customers Australia-wide. Aurizon Holdings Limited listed on the ASX in November 2010, and entered the S&P/ASX50 index in June 2011.
Our integrated business model provides a defensive stream of earnings from our regulated track infrastructure (Central Queensland Coal Network), whilst our rail haulage business is largely leveraged to coal, iron ore, and other bulk commodities.
A core part of our strategy is a multi-year, world class transformation program. This involves identifying and implementing initiatives to create a highly focused, performance-driven culture which will reduce our cost base, drive productivity improvements and create shareholder value.
Aurizon's key milestones are to achieve transformation benefits of $380m between FY2016-FY2018 and an operating ratio of 70% (EBIT margin of 30%) in respect of FY2018. Aurizon is also targeting an average of 10.5% return on invested capital (ROIC) over the FY2016 - FY2017 period. Aurizon's long-term target is to achieve an operating ratio of less than 70% and ROIC of 12-14%.
Aurizon reported an underlying Earnings Before Interest and Tax (EBIT) of $403 million and a Statutory Loss After Tax of $108 million for the half year ended 31 December 2015.
The result reflects the difficult trading environment for Aurizon customers with a 5% decline in tonnages and an 11% decline in revenue (compared to 1HFY15, which included a number of previously advised revenue impacts). 1HY16 revenue is down 4% and underlying EBIT down 2%, compared to 1HY15, when excluding these items (the sale of Redbank workshops, the completion of the QR maintenance contract, the sale of the CRT business, and reduction in Transport Service Contract payments).
The Statutory Loss After Tax includes impairment charges of $426 million. This includes impairments of $240 million outlined to the market in December 2015, and a further $186 million of impairments of which $174 million relates to the West Pilbara Iron Ore Project (WPIOP). As foreshadowed in December, Aurizon has reviewed the implications of the announcement in relation to WPIOP. As a result a further impairment relating to WPIOP and the related investment in Aquila has been made, given an assessment the project was unlikely to proceed in the short to medium term.
The Board of Directors declared an interim dividend of 11.3 cents per share (70% franked), up 12% on the previous corresponding period (10.1cps). The dividend will be paid on 29 March 2016 to shareholders on the register at the record date of 1 March 2016. The 100% payout ratio has been maintained based on Underlying Net Profit After Tax.
Due to a low growth environment, Aurizon has reduced its forecast capital expenditure by $150 million - $200 million for the next 18 months.
The Company bought back and cancelled 28.7 million of its shares at a cost of $140 million during the six month period, following the announcement on 11 November 2014 to buy-back up to 5% of issued share capital over a 12 month period.
Aurizon delivered $56 million of transformation benefits (cost reductions and efficiency improvements) in 1HY16.
Given the current market outlook, the Company will accelerate its program of work to reform its cost base, including the establishment of a dedicated transformation unit with direct CEO oversight. It will identify further opportunities to meet or exceed the $380 million transformation target by FY18.
The Lost Time Injury Frequency Rate (LTIFR) for the half year was zero, a first for the Company.
Return on Invested Capital (ROIC) declined from 9.4% to 8.8% compared to the prior corresponding half year due to lower underlying above rail earnings.
20 Jul 2016 - June 2016 Quarterly Above Rail Volumes+ ADD TO CALENDAR
15 Aug 2016 - FY2016 Full Year Results and Final dividend Announcement+ ADD TO CALENDAR
26 Aug 2016 - FY2016 ex-dividend date+ ADD TO CALENDAR
30 Aug 2016 - FY2016 Full Year dividend record date+ ADD TO CALENDAR
26 Sep 2016 - FY2016 Full Year dividend payment date+ ADD TO CALENDAR
18 Oct 2016 - September 2016 Quarterly Above Rail volumes+ ADD TO CALENDAR
18 Oct 2016 - Annual General Meeting+ ADD TO CALENDAR
13 Feb 2017 - 1H FY2017 Interim results and dividend announcement+ ADD TO CALENDAR
25 Feb 2017 - 1H FY2017 ex-dividend date+ ADD TO CALENDAR
28 Feb 2017 - 1H FY2017 Interim dividend record date+ ADD TO CALENDAR
27 Mar 2017 - 1H FY2017 Interim dividend payment date+ ADD TO CALENDAR
19 Apr 2017 - March 2017 Quarterly Above Rail volumes+ ADD TO CALENDAR
- Please note all dates are subject to change.
- Under the Listing Rules, the ASX determines shares trade 'ex' dividend, being two business days before the Record Date.
- Typically the Company declares the Record Date to be 10 to 12 business days after the declaration of the dividend.