<span class="" id="parent-fieldname-description"> Australian bulk and freight rail business Aurizon has announced a dramatic drop in profits in the 2013/14 financial year, and could be poised to sell off some of its Queensland track, according to reports. </span> <div>The former government body, which was privatised via public float in November 2010, announced a 43% fall in net profit after tax in the financial year just ended.<br /><br />NPAT for the Queensland-based rail giant slipped to $253m in 2013/14, down from $447m in the period prior.<br /><br />The profit slide was off the back of a 32% drop in earnings before interest and tax (EBIT), which fell to $465m.<br /><br />Aurizon said the EBIT drop was due to asset impairments of $317m, and $69m in voluntary redundancy program payments for its workforce, which dropped 4% in size to 7,524 workers.<br /><br />200 locomotives and almost 2,800 wagons were identified by Aurizon’s in-house Integrated Operating Plan as surplus to the company’s needs in the period, accounting for the significant asset impairment figure.<br /><br />Ignoring those two ‘one-off’ costs, Aurizon was able to quote an “underlying” EBIT of $851m for the financial year, which was in fact a 13% increase, year-on-year.<br /><br />Total revenue was also up, from $3.77bn to $3.83bn, a 2% rise.<br /><br />Coal volumes were 210.4mt, up 9%, and iron ore volumes were up 21% to 29.9mt. Freight volumes dropped 6% to 46.3mt.<br /><br />Company chairman John Prescott was upbeat, saying the company “has marched forward with both its transformation and growth plans and again demonstrated an ability to deliver a solid financial performance in tough market conditions.<br /><br />“The past year has seen a further deterioration in domestic economic conditions, with continued downward pressure on commodity prices, as well as volatile global equity markets. This environment has impacted many of our major customers and presented significant challenges for Aurizon.<br /><br />“However, through our Integrated Operating Plan and an unrelenting focus on cost control and business efficiency, a solid financial result has been delivered.”<br /><br />Aurizon shares slid from $5.03 on Friday night to $4.90 this morning, following Monday’s annual report release.<br /><br />Chief executive Lance Hockridge was in the news following the result, confirming the company would consider selling off a stake in its Queensland tracks to fund expansion in mining regions.<br /><br />Hockridge told Fairfax the company is considering a “range of options” to pay for new rail networks in the Pilbara as well as the Galilee Basin in Queensland.<br /><br />“One of those options would be the potential to sell down an interest in the central Queensland coal network,” he was quoted. Aurizon’s rail assets in Queensland are valued at about $4bn.
