Aurizon Holdings (QRL) Q4 2026 Earnings Report

The call communicated a broadly positive year: strong underlying financial results (EPS +29%, underlying EBITDA +9%, NPAT +24%), robust cash generation, a completed A$250m buyback, higher dividends and clear strategic progress (UT5+ regulatory progress, bulk growth, container momentum and vehicle logistics entry). Offsetting risks include a mixed safety outcome, a coal earnings reset driven by lower contracted volumes (contracted volumes down ~20m tonnes), a modest non‑cash impairment and one‑off costs, containerized freight not yet profitable (requires ~25% more volumes to breakeven) and exposure to coal market/supply and refinancing/interest rate risks. On balance the positives—notably financial strength, shareholder returns, regulatory progress and growth initiatives—outweigh the negatives, though execution on coal transformation and containerized freight breakeven are key watchpoints.

Aurizon guided FY2027 group underlying EBITDA of A$1.725–1.775 billion, full‑year dividends of A$0.23–0.24 per share, non‑growth CapEx of A$590–660 million (including ~A$25 million transformation capital) and growth CapEx of A$70–120 million; management expects network earnings to be higher, coal earnings to be lower (contracted volumes reduced while haul volumes stay broadly flat), bulk earnings higher (full‑year contribution from new contracts) and containerized freight to reach EBITDA breakeven in FY2027—all assuming no major supply‑chain or weather disruptions—and noted regulatory sensitivity (UT5+ placeholder WACC 7.79% now ~8.3%, and ~25 bps rise in the risk‑free rate would add ≈A$15m p.a. to network revenue); balance‑sheet context: net debt ≈A$5.2 billion, available liquidity ≈A$1.1 billion, gearing ~57%, net‑debt/EBITDA ~3x, interest hedging ~95%, and a capital allocation aim to target dividends in the 70–100% of underlying NPAT range (90% paid in FY2026).