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Aurizon shareholders will feel the pinch after the rail freight operator's net profit fell 19 per cent to $227 million for the December half.
The company declared an interim dividend of 11.4 cents per share (70 per cent franked), which is also down 19 per cent on the first half of fiscal 2018. The dividend will be paid on March 25.
Rail freight operator Aurizon has reported a net profit down 19 per cent for the first half.CREDIT:.PHOTO: GLENN HUNT
Revenue dropped more than $100 million compared to the prior corresponding period to $1.46 billion.
A number of factors combined to hit the company's earnings in the half, including a decision by the Queensland competition regulator to reduce the maximum allowable revenue it can get from the use of its central Queensland coal network rail track.
Earnings from Aurizon's network business fell 18 per cent, largely due to the impact on revenue from the regulator's decision, while the "Bulk" business results were impacted by the early closure of an iron ore haulage contract with the US's Cliffs Natural Resources.
The group's earnings from its coal division dropped 5 per cent to $210.3 million as Aurizon faced higher operating costs including maintenance spending. Coal costs also climbed as Aurizon invested in capacity to accommodate future volume growth.
Coal earnings were also affected by weather events, supply-side constraints and protected industrial action on the amount of coal Aurizon transported in the December half.
Overall, group earnings before interest and tax or EBIT (from continuing operations) fell 16 per cent to $406 million.
Aurizon chief executive Andrew Harding said Aurizon had delivered financial results in line with expectations.
"Today’s financial year results reflect the headwinds highlighted in August 2018 at our full-year reporting, as well as the impacts from the regulator’s final decision on the UT5 Access Undertaking, released in December 2018," he said.
"During the half, we have made progress on the company’s key priorities as we continue to deliver against our strategy," he said.
Shares in Aurizon were flat in early trade, up 3¢ to $4.46 at 10.40am.
This article first appeared on www.smh.com.au
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