Aurizon

Aurizon posts increase in profit, earnings with limited COVID impact

Aurizon has increased its earnings before interest and tax (EBIT) by 10 per cent on the previous year’s results and a 12 per cent increase in profit.

This improvement was largely driven by increased earnings from Aurizon’s managing of the Central Queensland Coal Network (CQCN) and strong performance of the company’s bulk business.

These results include the impact of COVID-19 on the business, which managing director and CEO Andrew Harding said had limited impact.

“Despite the emergence of COVID-19 in the second half of FY2020, the Company has delivered a solid operational and financial performance with no material impact as a result of the pandemic,” said Harding.

With much of Aurizon’s business involving the haulage of metallurgical coal, consistent steel production in China and a rebound of steel production in India in May and June helped the freight operator through the COVID-19 period. In addition, a drop in US metallurgical coal exports contributed.

In Aurizon’s coal business, it added new customers including Peabody and Bluescope and added volume in the contract with Coronado.

On the bulk side of the business, Aurizon added contracts with BGC for cement products from Kalgoorlie. Aurizon extended its contracts with South32 Cannington and Incitec Pivot, both on the Mt Isa corridor. Aurizon began the operation and maintenance of a ballast cleaning machine for Rio Tinto in the Pilbara and there was an increase in demand from Mineral Resources. These led to a 21 per cent increase in revenue from bulk operations.

In Aurizon’s management of the CQCN there was a shortfall of volume. Volumes are expected to be lower in the next year due to COVID-19.

Aurizon also reported on its safety record over the 2019-2020 financial year. While there was a 10 per cent improvement in the total recordable injury frequency rate, there was an 8 per cent deterioration in rail process safety performance.

Continuation of passenger rail services a priority

While official advice in Australia and New Zealand is to now limit all non-essential travel, authorities across both countries have prioritised keeping passenger rail services running to ensure that front-line health workers and other critical staff can get to work.

Queensland has now limited long-haul train services, however the state will maintain capacity on some routes, said Transport and Main Roads Minister, Mark Bailey.

“People will still have access to long distance passenger services for essential reasons on all key corridors, but the frequency of those services will be reduced, and we’ll manage passenger numbers on board to separate passengers from each other.”

Services which largely cater to tourists have been cancelled, including the Spirit of the Outback (Brisbane to Longreach), Westlander (Brisbane to Charleville), and Inlander (Townsville to Mount Isa). Additionally, The Savannahlander, Gulflander, and Kuranda Scenic Railway have also been suspended.

There will be no impact on freight services that use these lines.

Passenger services along Queensland’s east coast from Brisbane to Cairns will be reduced by 50 per cent.

Bailey noted that these measures will be temporary.

“These are temporary measures, but they are critical to curbing the spread of COVID-19 into our rural and regional communities.”

In South East Queensland, passenger services are continuing, however Queensland Rail is going cashless. EFTPOS transactions, online top ups or pre-purchased paper tickets are encouraged.

These measures have followed a fall in patronage of up to 60 per cent in Queensland.

Other jurisdictions have also seen large falls in passenger numbers, with a 40-45 per cent decline in NSW in the past two weeks. This drop has in some ways allowed for services to continue, as social distancing can be practiced.

“It is no surprise to anyone that customer numbers are down across our trains, buses, ferries and light rail due to the Coronavirus outbreak, however importantly this has created sufficient space on all modes to allow our customers to socially distance themselves in the majority of cases,” said Transport for NSW secretary, Rodd Staples.

Regional rail services in NSW remain running with booking measures in place to allow for social distancing.