Aurizon Holdings Ltd (ASX: AZJ) shares have plunged to a 13-year low of $3.02 on Monday.
This follows the release of a half year result from the $5.6 billion ASX 200 stock this morning.
Image source: Getty Images
ASX 200 stock hits 13-year low on results day
- Revenue up 3% to $2.02 billion
- EBITDA down 4% to $814 million
- Interim dividend down 5.15% to 9.2 cents per share (60% franked)
- Outlook: Group EBITDA and capex expected at the lower end of guidance
What happened during the half?
The rail freight operator's shares have touched a decade-plus low on Monday after disappointing with its half year results.
For the six months ended 31 December 2024, revenue rose 3% to $2.02 billion. However, EBITDA fell 4% to $814 million, weighed down by softer performances in the coal and bulk divisions.
The company's coal segment saw a 6% volume increase, but this was offset by a less favourable customer mix and rising operating costs. This led to a $19 million drop in EBITDA to $264 million.
The ASX 200 stock's bulk segment also struggled, with EBITDA falling $28 million to $84 million as new contract wins failed to offset declines in grain railings, the cessation of a rail maintenance contract, and a derailment in Western Australia.
The bright spot was Aurizon's network business, which grew EBITDA by $9 million to $495 million. This was due to higher allowable revenue, which was partially offset by increased maintenance costs and a reduction in external construction work.
On the bottom line the company reported a 14% decline in net profit after tax. This led to the ASX 200 stock's board trimming its interim dividend to 9.2 cents per share. Though, this dividend alone represents an attractive 3% dividend yield at current prices.
In addition to the dividend, the company has extended its on-market buyback by a further $50 million, taking the total to $300 million.
Management commentary
Managing director and CEO, Andrew Harding, was appeared to be relatively pleased with the result. He said:
Today's results underline the continuing strength of Aurizon's two largest business units, Network and Coal. Both businesses are performing solidly and broadly in-line with expectations in the first half. These businesses are leveraged to the ongoing demand for high-quality Australian coal on global markets. India remains Australia's largest trading partner for steel-making coal and is expected to be the largest driver of demand over the coming decades.
The strong cash flow generated by Network and Coal has supported investment in recent years in our two growthfocussed businesses, Bulk and Containerised Freight and in the building of capacity to capture emerging opportunities in these markets. Our Bulk business is leveraged to global demand for Australian commodities such as base metals, grain and magnetite. In particular, we see significant opportunities in resources and agriculture in South Australia and the Northern Territory which is serviced by the Tarcoola-to-Darwin rail line we acquired in 2022.
Outlook
Looking ahead, the ASX 200 stock has reaffirmed its EBITDA and capital expenditure guidance. However, it expects these to be at the lower end of their respective ranges.
Aurizon reaffirmed its full-year EBITDA guidance of $1.66 billion to $1.74 billion and sustaining capex of $640 million to $720 million.
