In a confusing interim report yesterday, Aurizon (AZJ), the Queensland based rail freight operator, managed to report several different profits – all of which were sort of accurate.
But the most important announcement was the interim dividend, which was set at 8 cents a share, up from the 4.1c partial dividend paid for the December half year of 2012 when the company was sold off and floated by the Queensland government.
"The Directors declared an 80% franked interim dividend of 8.0 cents per share which will be paid on 28 March 2014 to shareholders on the register at the record date of 5 March 2014. The 65% payout ratio has been maintained based on underlying Net Profit After Tax (removes impact of asset impairment and VR program costs)," Directors said. The 8 cents a share compared also with the 8.2 c a share paid as the final for 2012-13," directors said in yesterday’s statement.
"Underlying net profit after tax" rose 18% to $263 million for the six months to December 2013. But on a straight after tax basis, including significant items, profit fell 39% to $107 million from $176 million in the year-earlier period," they said.
The lower profit followed the warning at an update briefing on December 16 that it would take $197 million asset impairment charges in the first half, mostly due to shrinking its locomotive fleet by almost one third to 598 engines and cutting its wagon fleet by 12% to 16,292 cars by fiscal 2018. Aurizon also shed 262 jobs in the half because of voluntary redundancies.
AZJ 1Y – Aurizon shrinks fleet, raises dividend
Aurizon’s said its underlying earnings before interest and taxation (EBIT), which exclude the impairments and job cuts, rose 19% to $423 million from $356 million six months to December 2012, which was perhaps a clearer illustration of how the company performed in the latest six months.
The company lifted its full-year guidance for coal haulage volumes by around 3.5% to 207 million to 212 million tonnes from previous guidance of 200 million to 205 million tonnes.
The company said it remains on track to lower its operating ratio to 7% in 2014-15.
CEO, Lance Hockridge said in yesterday’s statement; “This is a strong result because it reinforces the traction Aurizon is getting with its transformation program and re-affirms we’re on target for an Operating Ratio of 75% in FY2015.
Aurizon is driving out costs and lifting productivity across operations in a persistently challenging economic environment where resource investment has moderated and general freight activity remains flat."
Aurizon shares closed up 1.7% at $5.19, but off its day’s high of $5.255.
