The Aurizon Holdings Ltd (ASX: AZJ) share price has sold off sharply from the open on Monday after the company posted its FY24 results before the open.
Shares in the rail freight operator are trading at $3.462 per share, down 6% in early trading as investors digest its yearly numbers.
Let's see what the company posted and what it means for the Aurizon share price moving forward.
Aurizon share price spikes on EBITDA growth
Key operating highlights from the year include the following:
- Revenue was $3.8 billion, up 9% over the previous year
- Underlying earnings before interest, tax, depreciation and amortisation (EBITDA) of $1.6 billion, up 14% compared to FY23
- Final dividend of 7.3 cents per share, 60% franked (FY24 total dividend 17 cents per share, up 13% year over year)
- Underlying net profit of $406 million, an increase of 11% from the prior year
- Free cash flow was up 123% to $661 million
- Authorised an on-market buyback of up to $150 million
What else happened in FY24?
It was an interesting year for the Aurizon share price in FY24. Management said it achieved improvements in safety performance, with a 15% reduction in the Total Recordable Injury Frequency Rate (TRIFR).
The company also launched new safety frameworks aimed at addressing fatigue and contractor safety.
Operationally, the coal segment's EBITDA rose by 16% to $528 million, driven by higher volumes and improved revenue yields.
The network EBITDA increased by 14% to $930 million due to "higher allowable revenue" and increased asset base.
It carried 209.6 million tonnes of resource across the Central Queensland Coal Network during the year, representing a 1% growth over FY23.
Finally, free cash flows were more than 120% higher than last year.
Management subsequently increased the dividend (final payment is 7.3 cents per share) and said it would buy back up to $150 million of the company's stock. No saying what this means for the Aurizon share price moving forward.
What did management say?
Aurizon's Managing Director & CEO, Andrew Harding, commented on the company's strong performance:
Aurizon has delivered a strong result in FY2024, with solid earnings growth and strong free cash flow…
…Aurizon is tracking well against our growth strategy. Aurizon is Australia's largest rail freight operator, with a national footprint and leveraged to demand for commodities and Asian economic growth.
We are seeing sustained demand for high-quality Australian commodities including metallurgical and thermal coal, iron ore, grains and phosphate, and emerging opportunities for containerised freight using rail-based supply chains.
Regarding the company's financial position, Harding said the company is well-placed to continue pushing ahead.
The business continues to be resilient, operationally and commercially, as we diversify our customer base and extend our customer service offering along the supply chain.
The cash-generative Coal and Network business units continue to provide the platform for investment in emerging markets for our Bulk and Containerised Freight businesses.
What's next?
Looking forward to FY25, Aurizon projects Group EBITDA in a range of $1.6 billion to $1.7 billion.
The company also anticipates making investments to capital expenditures of $720 million at the upper end of estimates.
Meanwhile, growth investments are forecast to range from $125 million to $175 million.
Aurizon share price snapshot
After catching a bid in the past month, the Aurizon share price is up more than 1% in the past month of trade.
It is down 2% over the last 12 months.
