Aurizon’s FY2025: Strategic Wins Offset EBITDA Dip Amid New Buy-back

FY2025 Financial Performance

Aurizon Holdings Limited closed FY2025 with an underlying EBITDA of $1.576 billion, marking a 3% decline compared to the previous year. Despite this slight dip, the company’s results aligned with its revised guidance announced in June. Net profit after tax (NPAT) fell 14% to $348 million, influenced partly by a $57 million goodwill impairment related to its Bulk business segment.

The company declared a final fully franked dividend of 6.5 cents per share, bringing the total dividend for FY2025 to 15.7 cents per share, an 8% decrease from FY2024. This payout reflects Aurizon’s commitment to returning value to shareholders amid a challenging operating environment.

Segment Performance and Operational Highlights

Segment results were mixed. The Network division saw a 3% increase in EBITDA to $956 million, buoyed by regulatory revenue growth despite higher maintenance and construction costs. The Coal segment’s EBITDA remained flat at $527 million, supported by a 2% increase in volumes hauled to 192.2 million tonnes, offsetting higher operating costs.

Conversely, the Bulk segment experienced a 26% EBITDA decline to $169 million, impacted by lower volumes and the non-recurrence of certain provisions. The company also reported a slight deterioration in safety metrics, with the Total Recordable Injury Frequency Rate rising to 8.29 from 7.36 the prior year.

Strategic Contracts and Regulatory Progress

Aurizon secured a landmark 15-year contract with BHP for copper logistics in South Australia, one of the company’s largest ever agreements. This contract includes both rail and road haulage services, underscoring Aurizon’s expanding footprint in diversified commodities logistics.

On the regulatory front, Aurizon advanced negotiations on the UT6 Access Undertaking, aiming to provide greater certainty and alignment with customer needs for its Queensland Network business. This progress is critical for underpinning long-term stability and investment in the network.

Cost Reduction and Capital Management

In response to market pressures, Aurizon has implemented a cost reduction program targeting $50 million in annualized savings, including a reduction of approximately 200 full-time equivalent roles. These initiatives are designed to reshape the company into a leaner, more agile organisation capable of navigating evolving market conditions.

Capital expenditure for FY2025 included $107 million in growth capex and $610–$660 million expected for sustaining capital in FY2026. The company completed a $300 million on-market buy-back during FY2025 and announced a new $150 million buy-back program for FY2026, signaling strong confidence in its balance sheet and cash flow generation.

Outlook for FY2026

Looking ahead, Aurizon expects underlying EBITDA to increase to between $1.68 billion and $1.75 billion in FY2026, supported by higher revenues in Network and Coal segments and the non-recurrence of certain provisions in Bulk. The company forecasts full-year dividends in the range of 19 to 20 cents per share, reflecting improved earnings and cash flow prospects.

While challenges remain, including cost pressures and safety performance, Aurizon’s strategic contract wins and regulatory progress position it well to capture growth opportunities in Australia’s rail freight sector.