Aurizon Holdings Delivers Strong FY2024 Results and Announces Share Buyback
AZJ (AZJ) Share Update August 2024 Sunday 11th
Aurizon Holdings Reports Strong FY2024 Results and Announces $150M Buyback
Aurizon Holdings Limited (ASX: AZJ) has reported its financial results for FY2024, showcasing strong performance with a 14% increase in EBITDA. The company also announced an on-market share buyback of up to $150 million.
Instant Summary:
- 14% increase in EBITDA to $1,624 million.
- Final dividend of 7.3 cents per share, total dividend of 17 cents per share for FY2024.
- On-market buyback of up to $150 million.
- 15% improvement in Total Recordable Injury Frequency Rate (TRIFR).
- 29% improvement in Actual and Potential Serious Injury and Fatality Frequency Rate (SIFRa+p).
Financial Performance
Aurizon Holdings Limited has reported a 14% increase in its underlying Earnings Before Interest, Tax, Depreciation, and Amortisation (EBITDA) for the fiscal year ending 30 June 2024. The EBITDA reached $1,624 million, up from $1,428 million in FY2023. This performance was within the company's guidance range.
Revenue for FY2024 was $3,844 million, a 9% increase from the previous year's $3,511 million. Net Profit After Tax (NPAT) also saw an 11% rise, reaching $406 million compared to $367 million in FY2023. Statutory NPAT showed a significant 25% increase to $406 million, up from $324 million in the previous year.
Dividend and Buyback
The Aurizon Board declared a final dividend of 7.3 cents per share, 60% franked, which will be paid on 25 September 2024. This brings the total dividend for FY2024 to 17 cents per share, a 13% increase compared to FY2023. Additionally, the company announced an on-market share buyback of up to $150 million, reflecting its strong free cash flow and lower gearing ratio.
Operational Highlights
The company's Coal segment reported an EBITDA of $528 million, a 16% increase driven by higher volumes and elevated revenue yield. The Bulk segment's EBITDA was $229 million, a 7% rise despite a 2% decrease in volumes hauled. The Network segment achieved an EBITDA of $930 million, a 14% increase due to higher allowable revenue and asset base.
Safety Performance
Aurizon reported significant improvements in its safety metrics, with a 15% reduction in Total Recordable Injury Frequency Rate (TRIFR) and a 29% reduction in Actual and Potential Serious Injury and Fatality Frequency Rate (SIFRa+p). The company has launched new safety frameworks, including a Fatigue Risk Management Framework and Contractor Safety Management strategies.
Outlook
Looking ahead to FY2025, Aurizon expects further earnings growth with Group EBITDA projected to be between $1,660 million and $1,740 million. Sustaining capital expenditure is anticipated to be in the range of $640 million to $720 million, with growth capital expenditure expected to be between $125 million and $175 million.
The strong financial performance and the announcement of a $150 million share buyback are likely to positively impact Aurizon's stock price. The increase in dividends and improvements in safety metrics further enhance investor confidence. However, the market will closely watch the company's ability to sustain this performance in the coming fiscal year.
Investor Reaction:
Analysts are expected to react positively to Aurizon's strong financial results and the share buyback announcement. The increase in dividends and improved safety performance are likely to be well-received by investors. However, some caution may be exercised regarding the company's projections for FY2025.
Conclusion:
Investors should consider the strong financial performance and strategic initiatives announced by Aurizon Holdings. The share buyback and increased dividends reflect the company's robust cash flow and commitment to shareholder returns. Monitoring the company's progress in FY2025 will be crucial for assessing long-term investment potential.