Aurizon to concentrate on coal

AURIZON is exiting the container freight business to increase its focus on its growing coal division, as the rail haul operator suffered a full-year loss of $188 million.

The bulk freight operator’s underlying earnings before interest and tax for the year to June 30 fell 4 per cent to $836 million, due to an estimated $89 million loss from the impacts of Cyclone Debbie. Aurizon chief executive Andrew Harding said despite the cyclone – which closed down the central Queensland coal network – coal continued to perform, with falls in Queensland volumes offset by higher numbers in NSW.

The company believes the demand, particularly for thermal coal from Asian markets, remains strong and forecast coal volumes to be between 215 and 225 million tonnes in 2017/2018.

The company’s net loss was flagged in July, after it outlined a $526 million writedown in the value of its bulk business, taking its full-year impairment charges to $927 million.

On Monday, Aurizon reported a loss in statutory earnings of $91 million, blaming the fall on the $811.2 million in asset impairments and $115.87 million in redundancy costs for more than 920 employees across the business.

Aurizon said that, following a review of its freight business, it would exit its intermodal container freight terminal business via a combination of closures and sales.