Aurizon : Appendix 4D

For personal use only

Aurizon Holdings Limited

ABN 14 146 335 622

ASX Market Announcements

ASX Limited

20 Bridge Street

Sydney NSW 2000

BY ELECTRONIC LODGEMENT

14 February 2022

Appendix 4D

Please find attached for immediate release to the market a copy of the Company's Appendix 4D for the half year ended 31 December 2021.

Yours faithfully

David Wenck

Company Secretary

Authorised for lodgement by the Aurizon Holdings Limited Board of Directors

T [phone] | F [phone] | [e-mail]

Level 8, 900 Ann Street, Fortitude Valley QLD 4006 Australia | GPO Box 456 Brisbane QLD 4001 Australia

onlyAurizon Holdings Limited usepersonal

Appendix 4D

Interim Financial Report

For the half-year year ended 31 December 2021 (1HFY2022)

This document should be read in conjunction with the Financial Report, including any disclaimer.

For
or further information please contact:
Investors:	Chris Vagg, Head of Investor Relations & Group Treasurer
	T [phone] | M [phone]
Media:	Mark Hairsine, Manager Media & Communications
	T [phone] | M [phone]

AURIZON HOLDINGS LIMITED	ASX APPENDIX 4D
HALF-YEAR ENDED: 31 DECEMBER 2021 (1HFY2022)
Table of Contents
1HFY2022 IN REVIEW.....................................................................................................................................................................	3
CONSOLIDATED RESULTS...............................................................................................................................................................	4
BUSINESS UNIT REVIEW.................................................................................................................................................................	9
only
Coal..........................................................................................................................................................................................................	9
Bulk........................................................................................................................................................................................................	11
Network.................................................................................................................................................................................................	12
Other .....................................................................................................................................................................................................	13
OPERATIONAL EFFICIENCY IMPROVEMENT UPDATE ....................................................................................................................	13
ADDITIONAL INFORMATION........................................................................................................................................................	15
APPENDIX....................................................................................................................................................................................	20
For personal use

Note: Previous corresponding period (pcp) for the year ended 31 December 2020 (1HFY2021)

Page 2

AURIZON HOLDINGS LIMITED

ASX APPENDIX 4D

HALF-YEAR ENDED: 31 DECEMBER 2021 (1HFY2022)

1HFY2022 IN REVIEW

Result Highlights (Underlying and statutory continuing operations)

			$m	1HFY2022		1HFY2021		Variance	2HFY2021
			Total revenue	1,515.2		1,498.4		1%	1,520.9
only	EBITDA	726.9		738.3		(2%)	743.9
			EBIT	434.2		454.2		(4%)	448.9
			Adjustments	-		-		-	8.2
			EBIT Statutory	434.2		454.2		(4%)	457.1
			NPAT	256.9		267.0		(4%)	266.2
			NPAT Statutory	256.9		267.0		(4%)	339.7
			Free cash flow (FCF)	362.2		288.1		26%	300.5
use		Interim dividend (cps)	10.5		14.4		(27%)	14.4
	Earnings per share (cps)	14.0		14.1		(1%)	14.4
	Return on invested capital (ROIC)	10.4%		10.8%		(0.4ppt)	10.7%
			EBITDA margin	48.0%		49.3%		(1.3ppt)	48.9%
			Operating ratio	71.3%		69.7%		(1.6ppt)	70.5%
			Above Rail Tonnes (m)	123.5		128.1		(4%)	125.1
			Gearing (net debt / (net debt + equity))	44.4%		47.8%		3.4ppt	45.6%
		Performance Overview
personal	›	EBITDA down $11.4m (2%) to $726.9m with:
	current credit ratings
				− Coal up $12.1m (4%) primarily due to an increase in above rail revenue quality and lower traincrew and maintenance expenses.
				This was partly offset by a reduction in above rail revenue from lower volumes
				− Bulk up $0.9m (1%) due to increased grain volumes, offset by the cessation of nickel and iron ore contracts
				− Network down $27.3m (7%) due to the recognition of $48.9m of WIRP Fees in 1HFY2021 relating to the period March 2016
				to June 2020 partly offset by lower (volume-related) revenue under-recovery compared to 1HFY2021.
				− Other improved by $2.9m (17%) due to higher asset sales
			›	EBITDA growth excluding historical WIRP fees in prior year would have been 5% for the Group and 6% for Network
			›	FCF increased 26% to $362.2m primarily due to lower tax and interest and acquisitions in 1HFY2021
			›	Interim dividend 10.5cps (95% franked) representing a payout ratio of 75% of underlying NPAT for the continuing operations, a
				decrease of 27%. The dividend reduction is to support the acquisition of One Rail Australia (One Rail) given the commitment to the

One Rail Acquisition

On 22 October 2021, Aurizon announced the acquisition of One Rail for $2.35b. There are two major components in the transaction:

1.One Rail Bulk - an integrated rail business in central Australia which will be combined with our existing Aurizon Bulk business, and

2.One Rail Coal (East Coast Rail) - a coal haulage rail business where the assets will be divested either through demerger or through a trade sale, whichever offers greater shareholder value.

The Australian Competition and Consumer Commission (ACCC) has commenced the informal merger clearance process with a provisional decision date of 10 March 2022. All other conditions precedent have been satisfied1 with consent received from the Australasia Railway

ForCorporation (AARC) and the Government of South Australia. Completion is targeted for April 2022, to be followed by the divestment of East Coast Rail.

Outlook

Underlying EBITDA guidance for FY2022 for Group remains at $1,425m to $1,500m. Group capital expenditure guidance is $540m to $580m including ~$100m supporting Bulk growth. Key assumptions are as follows:

• Coal - volumes now expected to be broadly in line with prior year with customer mix and cost management offsetting lower contracted rates
• Bulk - revenue and EBITDA higher due to recent contract wins and port acquisition on 31 December 2020
• Network - non-recurrence of retrospective WIRP fees ($49.8m) and Maximum Allowable Revenue (MAR) reduction due to capital recoveries
• Excludes EBITDA and capex for One Rail
• No material disruptions to commodity supply chains (such as adverse weather and/or impacts from COVID-19 related restrictions)

1 As at publication date

Note: Previous corresponding period (pcp) for the year ended 31 December 2020 (1HFY2021)

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AURIZON HOLDINGS LIMITED

HALF-YEAR ENDED: 31 DECEMBER 2021 (1HFY2022)

CONSOLIDATED RESULTS

Underlying continuing operations unless otherwise stated Financial Summary

$m

only	Total revenue and other income
	Operating costs
	Employee benefits
	Energy and fuel
	Track access
	Consumables
	Other
use	EBITDA
Statutory EBITDA
Depreciation and amortisation
	EBIT
	Statutory EBIT
	Net finance costs
	Income tax expense
	Statutory Income tax expense
personal	NPAT
Statutory NPAT
	Statutory NPAT from discontinued operations
	NPAT (group) Statutory
	Earnings per share2
	Statutory
	Earnings per share2 (continuing and discontinued operations)
	Statutory
	Return on invested capital (ROIC)3
	Net cash flow from operating activities
	Interim dividend per share (cps)
	Gearing (net debt / (net debt + equity)) (%) (group)
	Net tangible assets per share ($) (group)
	People (FTE)
	Labour costs4 / Revenue
	Above Rail Tonnes (m)5
ForOther

EBITDA by Segment $m

Coal

Bulk

Network

Group (Continuing operations)

ASX APPENDIX 4D

1HFY2022		1HFY2021	Variance	2HFY2021
1,515.2		1,498.4	1%	1,520.9
(423.0)	(422.3)	-	(413.9)
(115.4)	(91.8)	(26%)	(99.6)
(39.5)	(46.0)	14%	(35.1)
(206.3)	(194.4)	(6%)	(221.8)
(4.1)	(5.6)	27%	(6.6)
726.9		738.3	(2%)	743.9
726.9		738.3	(2%)	752.1
(292.7)	(284.1)	(3%)	(295.0)
434.2		454.2	(4%)	448.9
434.2		454.2	(4%)	457.1
(64.5)	(73.3)	12%	(72.0)
(112.8)		(113.9)	1%	(110.7)
(112.8)	(113.9)	1%	(45.4)
256.9		267.0	(4%)	266.2
256.9		267.0	(4%)	339.7
-		5.2	(100%)	118.4
256.9		272.2	(6%)	458.1
14.0		14.1	(1%)	14.4
14.0		14.1	(1%)	18.4
14.0		14.4	(3%)	14.7
14.0		14.4	(3%)	24.8
10.4%		10.8%	(0.4ppt)	10.7%
710.9		700.4	1%	576.6
10.5		14.4	(27%)	14.4
44.4%		47.8%	3.4ppt	45.6%
2.2		2.2	-	2.3
4,872		4,840	(1%)	4,825
27.6%		28.0%	0.4ppt	26.5%
123.5		128.1	(4%)	125.1

1HFY2022		1HFY2021	Variance	2HFY2021
286.2	274.1	4%	259.2
74.5	73.6	1%	66.3
380.4	407.7	(7%)	441.1
(14.2)	(17.1)	17%	(22.7)
726.9	738.3	(2%)	743.9

1. Calculated on weighted average number of shares on issue - 1,840m 1HFY2022 and 1,892m 1HFY2021
2. ROIC is defined as underlying rolling twelve-month EBIT divided by the average invested capital. The average invested capital is calculated as the rolling twelve-month average of net assets (excluding cash, borrowings, tax, derivative financial assets and liabilities)
3. 1HFY2022 excludes $4.0m redundancy costs (1HFY2021 excludes $2.6m redundancy costs)
4. Includes both Coal and Bulk

Note: Previous corresponding period (pcp) for the year ended 31 December 2020 (1HFY2021)

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