Aurizon faces new setbacks
AURIZON has outlined fresh impairments of $ 606 million with its intermodal and bulk transport divisions continuing to face a challenging market. The rail freight operator expects full- year underlying earnings will be $ 836 million, within its revised guidance range of $ 800-$ 850 million. However, it could be left facing a full- year loss after flagging a fresh $ 526 million writedown in its bulk business and transformationrelated costs of $ 80 million, taking its full- year impairment charges to $ 927 million.
Aurizon took $ 321 million worth of writedowns in its first half results and, in April, cut its full- year earnings guidance after a $ 115 million hit from damage and lower haulage volumes caused by Cyclone Debbie. FORTESCUE Metals is targeting a further reduction in costs this financial year but expects to keep iron ore shipments steady.
The world’s fourth- largest iron ore exporter shipped 44.7 million tonnes of iron ore in the final three months of 2016- 17, up 3 per cent from a year earlier. That took full- year shipments to 170.4 million tonnes, just above the company’s guidance of 165 million to 170 million tonnes.
Cash costs were trimmed 7 per cent from the March quarter, and full year average $ US12.82/ wmt was down 17 per cent.
Chief executive Nev Power said the Pilbara miner was well positioned to continue to improve costs, invest in the core iron ore business and maintain production levels in the 2017- 18 financial year.