Queensland-based rail freight operator Aurizon has lifted interim dividend 20% percent and will spend another $100 million on its share buyback following a solid performance in the six months to December.
Aurizon said higher revenue in its bulk and network businesses were behind the 12% jump in first-half earnings before interest and tax, to $455.6 million for the six months to December 31.
Aurizon’s underlying net profit rose a 19% to $268.9 million off the back of a 5% rise in revenue to $1.53 billion.
Interim dividend was set at 13.7 cents a share, 70% franked and up 20% from a year ago.
“The company delivered a solid half-year result which confirms full-year guidance,” CEO Andrew Harding told analysts on a conference call.
The company has increased its share buyback by $100 million to $400 million and says it more than half completed.
Aurizon executives said they are expecting higher competition in Queensland coal with US-owned and NSW based rail freight operator Genesee & Wyoming Australia expected to move north.
Aurizon reconfirmed its full-year earnings guidance of $880 million to $930 million, although that assumed there was no material impacts from adverse weather or the coronavirus outbreak.
Aurizon earned $887.5 million – 58% of its revenue – during the half-year from transporting coal from mines in Queensland and NSW to customers and ports, and described itself as a “critical link” in Australia’s coal supply chain.
Aurizon shares rose 2.6% to $5.47.
