Aurizon’s half-year results, to be delivered on Monday, will be a big test of whether its $2.39bn acquisition of One Rail Australia in 2021 has delivered.
After the deal, the country’s largest freight rail operator sold the coal haulage operations within One Rail for $425m to appease competition regulators.
The idea was to reduce the proportion of revenue it generated from coal-related activities to appease the environmental, social and governance reporting standards of its institutional investors.
Analysts say Aurizon’s coal operation has been performing strongly, but bulk haulage momentum from new contract wins and the ramp up of the containerised freight business will be under watch, as will synergies from the OneRail deal, which remain a focus for management.
Jefferies analysts say Aurizon is well positioned to deliver earnings towards the top end of its forecasts before interest, tax, depreciation and amortisation for the 2024 financial year.
It has reaffirmed fiscal 2024 guidance of annual EBITDA between $1.59bn and $1.68bn.
“The 2024 financial year results are an important milestone to give confidence in the upside in earnings,” the Jefferies analysts said.
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