Regulatory Review Looms as Aurizon Extends Buy-Back and Raises Profit Outlook

Strong Half-Year Financial Performance

Aurizon Holdings Limited has delivered a robust financial performance for the half-year ended 31 December 2025, with underlying earnings before interest, tax, depreciation and amortisation (EBITDA) rising 9% to $891 million. This growth was underpinned by solid contributions from its coal and bulk freight segments, alongside increased track access revenue in its network operations.

The coal segment saw a 13% increase in EBITDA to $298 million, driven by higher volumes and favourable price indexation, while bulk freight EBITDA surged 39% to $117 million, benefiting from volume growth and the absence of prior year impairments. Network EBITDA also rose 4% to $516 million, supported by regulatory track access revenue increases.

Profitability and Shareholder Returns

Net profit after tax (NPAT) climbed 16% to $237 million, reflecting operational improvements and the impact of share cancellations from ongoing buy-back programs. Earnings per share grew 20% to 13.6 cents, boosted by a reduced share count. The company declared an interim dividend of 12.5 cents per share, 90% franked, representing a payout ratio of 90% of underlying NPAT.

In a move to further enhance shareholder value, Aurizon extended its on-market share buy-back program by $100 million, increasing the total buy-back capacity to $250 million. This signals management’s confidence in the company’s cash flow generation and capital management strategy.

Outlook and Capital Management

Looking ahead, Aurizon maintained its full-year underlying EBITDA guidance between $1.68 billion and $1.75 billion. The full-year dividend forecast was raised to 22-23 cents per share, up from the previous 19-20 cents range, reflecting the company’s improved earnings trajectory.

Capital expenditure guidance was slightly trimmed for non-growth projects to $580 million–$600 million, while growth capex remains steady at $100 million–$150 million. Aurizon continues to focus on disciplined capital allocation and operational efficiency.

On the funding front, Aurizon has successfully extended and amended various debt facilities, including a $500 million syndicated bank facility and a $65 million private placement of medium-term notes. The company also established a commercial paper program, enhancing liquidity which stood at nearly $2 billion at the half-year mark. Credit ratings for both Aurizon Operations and Network remain stable at BBB+/Baa1.

Regulatory Developments

Regulatory progress includes the Queensland Competition Authority’s approval of Network’s FY2025 maintenance and capital expenditure claims, with cost recoveries scheduled through future tariffs. Aurizon has submitted a voluntary extension application to the QCA to prolong the Central Queensland Coal Network access agreement by 10 years, a move supported by customers representing 74% of contracted volumes. The QCA’s review process is underway, with a decision expected within six months.

This regulatory clarity is crucial for Aurizon’s long-term planning and revenue stability, particularly given the importance of the Central Queensland Coal Network to its coal haulage operations.