Aurizon FY26 Underlying EBITDA $1.72bn, Dividend Up 46%

Aurizon (ASX:AZJ) reported FY2026 underlying EBITDA of $1,724 million, up 9% on FY2025, on underlying revenue of $4,194 million, up 6%. Underlying EBIT was $985 million, up 17%, underlying net profit after tax was $433 million, up 24%, and statutory NPAT was $362 million, up 19%. Free cash flow was $573 million, up 11%, underlying earnings per share were 25.2 cents, up 29%, underlying return on invested capital was 9.5%, up 1.4 percentage points, and net debt to underlying EBITDA was 3.0 times against 3.3 times a year earlier. Aurizon defines free cash flow as net cash flow from operating activities less non-growth capex and interest paid, excluding growth capex of $146 million in FY2026, payments for acquisitions and cash flows from significant items. Underlying earnings is a non-statutory measure derived by adjusting statutory earnings for significant items and timing differences. The FY2026 reconciliation shows a $27 million Network revenue timing difference, reflecting track access revenue collected below the comparative allowable revenue, and significant items comprising a $54 million asset impairment of the Coal NSW cash generating unit, $19 million of technology upgrade costs relating to an enterprise resource planning migration and $1 million of transformation costs. Aurizon said no restatement has been undertaken in the prior comparable period for Network revenue timing differences, and that the impact on FY2025 underlying earnings would have been a positive $51 million pre-tax and a positive $36 million post-tax.

By business, Network EBITDA rose 8% on higher regulatory revenue, partly offset by increased operating costs; Coal EBITDA rose 2% on price indexation, partly offset by customer mix, with flat unit costs and net access and fuel benefits; and Bulk EBITDA rose 38% on customer growth and the non-recurrence of prior year doubtful debt provisions, more than offsetting major customer start-up costs and net fuel under-recovery. The Board declared a final dividend of 10.5 cents per share, 90% franked, representing a payout ratio of 90% of underlying NPAT, taking full year dividends to 23.0 cents per share, up 46% on FY2025, and Aurizon completed a $250 million on-market share buy-back during the year. On safety, the Actual and Potential Serious Injury and Fatality Frequency Rate improved while performance for the Total Recordable Injury Frequency Rate declined. Managing Director and Chief Executive Andrew Harding said Aurizon has recontracted over a quarter of its Coal contract book, including a new long-term contract with BHP Mitsubishi Alliance announced the same day, and that the Queensland Competition Authority published a draft decision in June 2026 indicating that for the material part the proposed UT5+ Access Undertaking is appropriate and providing a pathway to final approval. For FY2027 Aurizon expects group underlying EBITDA of $1,725 million to $1,775 million, full year dividends of 23.0 to 24.0 cents per share, non-growth capex of $590 million to $660 million including about $25 million of transformation capital, and growth capex of $70 million to $120 million, with Network and Bulk EBITDA expected to be higher than FY2026 and Coal EBITDA expected to be lower on reduced contracted volumes and yield.