Aurizon struggles to get back on right track

ANALYSTS say Aurizon’s turnaround strategy is not going smoothly after the freight giant warned it is set for its first full-year loss since being floated.

RBC Capital Markets said the company’s announcement showed the turnaround initia- tives for its bulk commodities business were more complicated and would take longer than expected.

RBC said it was maintaining its underperform call on the Brisbane-based company’s shares after Aurizon said it would write down the value of its bulk freight business by $526 million. The company also said it would log $80 million of extra costs and impairments.

The brokerage said the $80 million impairment partly reflected the phased closure of a heavy maintenance workshop and the reshaping of train crew operations in Queensland.

Aurizon has slashed thousands of jobs, closed workshops and cut other costs in recent years after the former government-owned QR National was privatised in 2010.

New chief executive Andrew Harding earlier this year signalled a renewed efficiency drive after a period of battling slumping commodity markets, a downturn in freight and a failed investment in mining.

Burrell Stockbroking senior research analyst Bruce McLeary said investors would be looking for signs of a definite turnaround strategy when Aurizon announced annual results next month.

“There is not a lot of love for Aurizon,” Mr McLeary said. “It is taking a lot longer than expected for the turnaround.”