Aurizon to dump freight, cut 250 jobs after $188m loss

RAIL giant Aurizon will offload its general freight business including its Acacia Ridge intermodal terminal after announcing a $188 million loss for the past year.

The Brisbane-based company yesterday said continuing losses at its intermodal business and the impact of Cyclone Debbie on its coal network had hit profits.

Revenue had flatlined at $3.45 billion for the year after a shutdown of the Queensland coal network in Queensland following the cyclone in March this year.

Aurizon chief executive Andrew Harding said the Queensland intermodal business would be bought by a consortium of Linfox and Pacific National for about $220 million after racking up losses over several years.

The intermodal terminal at Acacia Ridge will be sold in a separate transaction to Pacific National while the intermodal business outside Queensland would be closed.

“The intermodal business was not a sustainable business for our shareholders or employees,” Mr Harding said. “Of the past 10 years, only three years have been profitable.”

About 380 employees in Queensland will be transferred to the consortium but approximately 250 employees will be affected by the closure of the interstate freight business.

Mr Harding said the freight business had struggled in a competitive market where government policy favoured road transport.

Mr Harding, who joined the company in January, said the exit from the freight business would allow Aurizon to concentrate on its core business of moving coal and other bulk commodities.

Aurizon’s result was dragged down by $927 million in impairment charges and costs tied to the business overhaul. Aurizon said that it planned to buy back shares worth around $300 million using surplus capital.

Burrell Stockbroking analyst Bruce McLeary said while the decision to exit the intermodal business was a positive, Aurizon’s core business remained problematic.

Mr McLeary said the company faced having to renegotiate many of its coal haulage contracts over the next year.

Aurizon shares closed down 1.17 per cent at $5.07.