Demand for coal falling: Aurizon
QUEENSLAND rail giant Aurizon has warned the COVID-19 pandemic will curb demand for Australian coal.
Brisbane-based Aurizon’s profit rose 28 per cent to $605m for the year to June 30 on the back of a 5 per cent increase in revenue to $3.06bn.
Its earnings before tax and interest rose 22 per cent compared with the previous corresponding period, booking a statutory EBIT of $909m for financial year 2020.
But looking forward the company warned the pandemic would reduce demand for Australian coal in key Asian steelmaking countries.
Aurizon chief executive Andrew Harding (pictured) said that despite the emergence of COVID-19 in the second half of the financial year, the company had delivered a solid operational and financial performance.
“There was no material impact as a result of the pandemic,” Mr Harding said. “Aurizon’s response to COVID-19 is anchored to our value of safety, with the health and wellbeing of employees our top priority.
“We have benefited from our decentralised workforce with 80 per cent of our people operating in regional areas.”
Aurizon’s coal business delivered 214 million tonnes of coal for customers during the year, which was broadly in line with 2019.
Mr Harding said demand for coal was expected to soften during 2021 due to COVID-19, especially metallurgical coal shipped to Asia.
India has suffered a slide in steel production due to the pandemic.
“There is a terrible short impact of COVID on the steel industry but we do see it as temporary,” said Mr Harding.
“You will see soft production export from Australia though the first half and we are seeing signs of that already.”
Mining giant Glencore will temporarily shut its NSW and Queensland coal mines due to tepid demand and a slump in prices.
Both thermal and metallurgical coal have suffered a slide in demand and price from the COVID-19 pandemic, with many producers suffering losses at current market prices.
Aurizon declared a final dividend of 13.7c per share, taking the full year dividend to 27.4c.