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Aurizon suffers $188m FY loss

Simone Ziaziaris  |  14 Aug 2017Text size  Decrease  Increase  |  

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SYDNEY - [AAP] Rail freight operator Aurizon (ASX: AZJ) has posted a full-year loss of $188 million on the back of a $927-million hit from asset impairments and redundancy-related costs.

The company reported a loss in statutory earnings of $91 million, blaming $811.2 million in asset impairments, including a $526 million writedown in the value of its bulk business, and $115.87 million in redundancy costs for more than 920 employees across the business.

Its underlying earnings before interest and tax for the year to June 30 was down 4 per cent at $836 million, on the back of an estimated $89 million loss from the impacts of Cyclone Debbie, lower iron ore earnings and a deterioration in the performance of its freight business.

Aurizon said the cyclone, plus a deterioration in the financial performance of the freight business, more than offset the realisation of sustainable transformation benefits of $129 million.

Chief executive Andrew Harding said Aurizon had the potential to deliver and would work to improve its business and customer outcomes.

"Today's results and announcements underline our determination to return to the fundamental strengths of our core business and to ensure we unlock value and return it to shareholders," Mr Harding said.

He said the company had decided to exit its intermodal business--closing one component and selling two others--following a 12-month review which found the business did not offer a "sustainable commercial future".

"The business has not been able to establish significant scale and a customer base to support a profitable business in such a highly competitive market," Mr Harding said.

"While a difficult decision for affected employees, exiting the business will allow the company to focus on core, profitable parts of the Aurizon portfolio including the ability to recycle capital into other growing parts of our business."

The company said it will sell its Queensland intermodal business to LinFox and its Acacia Ridge intermodal terminal to Pacific National, which together amount to $220 million, but will close the remainder of its intermodal business, which is outside of Queensland, by December.

AURIZON SUFFERS ON IMPAIRMENT HIT:

* Statutory net profit loss of $188m, from a profit of $72.4m

* Statutory earnings (EBIT) loss of $91m, from a profit of $343.4m

* Final dividend of 8.9 cps, partially franked, from 13.3cps

 

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