Key Highlights

  • Aurizon Holdings Limited (ASX:AZJ) reported FY2026 underlying EBITDA of $1.724 billion, an increase of 9% from $1.576 billion in FY2025.
  • Underlying NPAT rose 24% to $433 million, while free Cash Flow increased 11% to $573 million.
  • Full-year dividends increased 46% to 23.0 cents per share, alongside completion of a $250 million on-market share buyback.
  • Aurizon expects FY2027 underlying EBITDA of $1.725 billion to $1.775 billion, with full-year dividends forecast at 23.0 to 24.0 cents per share.

Aurizon Holdings Limited (ASX:AZJ) reported a higher Earnings outcome for FY2026, with underlying EBITDA increasing 9% to $1.724 billion from $1.576 billion in the previous financial year. Revenue increased 6% to $4.194 billion, while EBIT rose 17% to $985 million.

Underlying NPAT reached $433 million, compared with $348 million in FY2025, representing a 24% increase. Statutory NPAT was $362 million, up 19%. The difference between the two measures reflects timing differences and significant items, including a $54 million Impairment associated with the Coal NSW cash-generating unit and $19 million related to a technology upgrade.

Free cash flow increased 11% to $573 million, while Earnings Per Share rose 29% to 25.2 cents. Return on invested Capital also increased to 9.5%, compared with 8.1% a year earlier.

Network and Coal Operations

Aurizon's Network Business recorded an 8% increase in EBITDA, supported by higher regulatory revenue. This improvement was partly offset by increased operating costs. During the year, the company progressed the UT5+ Access Undertaking for the Central Queensland Coal Network, with the Queensland Competition Authority publishing a draft decision in June 2026.

The proposed undertaking is intended to establish access and pricing arrangements for the next decade from the beginning of FY2027. The regulatory process remains an important Factor in determining the future operating framework for the Network business.

Coal EBITDA increased 2%. Price indexation contributed to the result, although customer mix affected the outcome. Unit costs were broadly unchanged, while net access and fuel movements also contributed to earnings.

Aurizon also recontracted more than a quarter of its Coal contract book during the year, including a new long-term rail haulage agreement with BHP Mitsubishi Alliance. Contract renewals are relevant to the future Volume and revenue profile of the business as existing agreements mature.

Bulk Business Records Higher Contribution

Bulk EBITDA increased 38%, making it the fastest-growing major business within the Group during FY2026. Customer growth and increased volumes across several Commodity sectors contributed to the result, while the absence of prior-year doubtful Debt provisions also supported the comparison.

The first full year of Aurizon's BHP Copper South Australia logistics contract was another notable development. The agreement involves the movement of copper-related freight through an integrated road-to-rail logistics model.

Containerised Freight also progressed during the year, with new customer commitments from CEVA Logistics and NYK covering automobile transportation in Australia. Aurizon expects Containerised Freight to reach EBITDA breakeven in FY2027.

Shareholder Returns and Balance Sheet

Aurizon increased total dividends to 23.0 cents per share for FY2026, compared with 15.7 cents in FY2025. The final Dividend was set at 10.5 cents per share and is 90% franked, with payment scheduled for 23 September 2026 to eligible shareholders.

The company also completed a $250 million on-market share buyback. Net debt relative to EBITDA declined from 3.3 times to 3.0 times, reflecting the movement in earnings and the company's capital position.

FY2027 Outlook

Aurizon expects underlying EBITDA for FY2027 to range between $1.725 billion and $1.775 billion. Network EBITDA is expected to increase, supported by higher regulatory revenue, while Coal EBITDA is forecast to decline because of lower contracted volumes and yield.

Bulk EBITDA is expected to increase through full-year contributions from new customer growth and the absence of certain one-off costs, although reduced South Australian iron ore volumes are expected to provide an offset. Other earnings are forecast to improve, with Containerised Freight expected to reach EBITDA breakeven.

Non-growth Capital Expenditure is projected at $590 million to $660 million, including approximately $25 million of transformation capital, while growth capital expenditure is expected to be $70 million to $120 million.

Conclusion

Aurizon's FY2026 results show an increase in earnings, cash generation and Shareholder distributions, with the Bulk division providing the largest year-on-year EBITDA improvement among the major operating businesses. Network earnings benefited from regulatory revenue, while Coal remained comparatively stable amid contract and pricing changes. For FY2027, the company's earnings outlook reflects differing trajectories across its businesses, with higher expected contributions from Network and Bulk partly offset by lower Coal earnings. The progression of the UT5+ regulatory framework, customer contract developments and the performance of newer freight operations will remain important factors in the company's financial results.