Aurizon Posts 9% EBITDA Growth and Secures Long-Term BMA Coal Contract

Strong Financial Performance Across Core Segments

Aurizon Holdings (ASX:AZJ) delivered a robust FY2026 with underlying EBITDA climbing 9% to $1,724 million, supported by solid contributions from its Network, Coal, and Bulk businesses. Net profit after tax rose 24% to $433 million, while earnings per share surged 29%, helped by a $250 million on-market buy-back that cancelled 67 million shares, or 3.8% of issued capital.

The Bulk segment was the standout performer, posting a 38% EBITDA increase to $233 million, driven by customer growth and the non-recurrence of prior year doubtful debt provisions. Network EBITDA grew 8% to $1,030 million, buoyed by higher regulatory revenue despite increased operating costs. Coal EBITDA edged up 2% to $540 million, reflecting price indexation and flat unit costs, though volumes remained broadly flat.

Dividend Boost and Capital Management

The Aurizon board declared a final dividend of 10.5 cents per share, fully franked at 90%, marking a 62% increase on the prior year’s final dividend. This lifts the full-year dividend to 23.0 cents per share, up 46%. The payout ratio stands at a disciplined 90% of underlying NPAT, underscoring Aurizon’s commitment to returning capital to shareholders.

The company’s confidence in its balance sheet and cash flow generation was further demonstrated by the completion of the $250 million share buy-back at an average price of $3.72 per share.

Major Contract Win with BHP Mitsubishi Alliance

In a significant commercial win, Aurizon secured a new long-term, performance-based coal haulage contract with BHP Mitsubishi Alliance (BMA) for its Queensland mine operations. Effective from 1 July 2028, the contract covers up to 37 million tonnes per annum over a potential 12-year term, possibly extending Aurizon’s relationship with BMA to 2040. This replaces the existing 2015 contract and reinforces Aurizon’s dominant position in the Bowen Basin coal haulage market, where BMA accounts for nearly a quarter of Aurizon’s Queensland coal tonnes.

Regulatory Developments and Operational Highlights

Aurizon’s Network business is progressing a draft Access Undertaking (UT5+) with the Queensland Competition Authority (QCA), which proposes a ten-year regulatory framework commencing July 2027. The QCA’s June 2026 draft decision largely supports Aurizon’s submission, including updated Weighted Average Cost of Capital (WACC) parameters and a new throughput payment designed to incentivise network performance. The final decision is pending submissions due by 20 August 2026.

The Network segment also faced a $4.5 million flood rectification cost in the Moura coal system, classified as a Review Event under the Access Undertaking, with Aurizon planning to submit a claim for recovery in FY2027.

Outlook and Strategic Focus

Looking ahead to FY2027, Aurizon expects underlying EBITDA to range between $1,725 million and $1,775 million, with dividends forecast between 23.0 and 24.0 cents per share. Non-growth capital expenditure is projected at $590 million to $660 million, including $25 million in transformation capital, while growth capex is expected to be $70 million to $120 million.

The company anticipates higher Network EBITDA driven by regulatory revenue recognition and cost pass-throughs, a slight decline in Coal EBITDA due to reduced contracted volumes, and further Bulk segment growth from new customers and the unwinding of one-off costs. Containerised Freight is expected to reach break-even on an EBITDA basis.

Aurizon’s Managing Director Andrew Harding highlighted the company’s disciplined execution of strategy focused on productivity, operational efficiency, and capital discipline, which underpins the strong shareholder returns and positions Aurizon well to capitalise on growth opportunities in bulk commodities, containerised freight, and critical minerals logistics.