Rail group Aurizon inched up its final dividend after reporting stagnant revenue and earnings for the 2020-21 financial year and forecasting not much of an improvement for 2021-22.
Statutory net profit from continuing operations was flat at $607 million, compared to $605 million in 2019-20 while earnings before interest, tax depreciation and amortisation (EBITDA) rose by just 1% to $1.482 billion.
That was ahead of optimistic market expectations of $1.45 billion and came on a 25% dip in revenue to $3 billion, which was slightly lower than analyst forecasts.
Aurizon increased the final dividend by 5% to 14.4 cents, partially franked. That made the full-year dividend 28.8 cents a share and the highest dividend in a decade.
And it is not looking at an improvement in 2021-22 by forecasting group earnings to be between $1.425 billion and $1.5 billion.
Aurizon said the volume of above-rail coal that it hauled dropped 6% “primarily as a result of lower-end market demand driven by COVID-19 related disruptions and China import restrictions” on Australian coal exports.
That saw coal-related earnings down by 13% compared to the previous year to $533 million.
“We expect coal volume growth of around 5 per cent in 2021-22, as markets recover and with Australian coal successfully redirected into alternative markets,” CEO Andrew Harding said in a statement with the annual results.
However the company’s bulk business had strong earnings growth, up 27%to $140 million thanks to new contracts and higher volumes from existing customers.
“This included expansion tonnages for Mineral Resources and a three-year contract extension with South32 Worsley, both in Western Australia,” Mr Harding said.
“We have aspirations to double the earnings of the Bulk business over the next decade. This includes organic growth, extending across the supply chain and acquisitions such as our new ports businesses in Newcastle and Townsville,” Mr Harding said in Monday’s statement.
Aurizon also completed a $300 million on-market share buy-back last year.
Aurizon shares were up 1.7% to $4.13 at the close, an 8-month high.
