Highlights

• Underlying net profit after tax rose 24% to $433m in FY2026, while underlying EBITDA climbed 9% to $1,724m.

• Full-year dividends reached 23.0 cents per share, up 46%, including a 10.5 cent final dividend franked at 90%.

• Aurizon completed its $250m on-market buy-back at an average $3.72 a share and cut leverage to 3.0 times EBITDA.

• FY2027 guidance targets underlying EBITDA of $1,725m to $1,775m, with Coal earnings expected lower on reduced contracted volumes.

Rail freight growth, a refreshed coal contract book and a regulator's early support have converged behind Aurizon Holdings Limited (ASX:AZJ) after a year of 24% higher underlying profit. Underlying net profit after tax reached $433m for FY2026, up from $348m, on revenue and other income of $4,194m. Shares were trading at A$3.85 on 23 October 2026, up 0.26%.

Every Haulage Unit Added to Earnings

Underlying EBITDA rose 9% to $1,724m and underlying EBIT lifted 17% to $985m, taking the EBITDA margin to 41.1%. Statutory net profit after tax was $362m, up 19%, after significant items that included a $54m impairment on the Coal NSW asset base.

Network EBITDA rose 8% to $1,030m. Coal edged up 2% to $540m on price indexation, while Bulk jumped 38% to $233m as new customers came on and prior-year doubtful debt provisions did not recur. Free cash flow grew 11% to $573m.

Bigger Payouts and a Lower Leverage Ratio

Aurizon declared a final dividend of 10.5 cents per share, franked at 90%, which equals 90% of underlying profit. Full-year dividends totalled 23.0 cents, compared with 15.7 cents a year earlier. The final dividend carried a record date of 1 September 2026 and a payment date of 23 September 2026.

The $250m on-market buy-back finished at an average price of $3.72. Net debt held at $5.2bn, gearing moved to 57.0% from 56.2%, and net debt to EBITDA eased to 3.0 times from 3.3 times. Management plans to amend and extend about 70% of bank debt during FY2027.

Contracts Reshape the Coal and Bulk Books

Aurizon recontracted more than 60 million tonnes of annual coal volume since July 2025, including agreements with BMA and Whitehaven. That covers more than a quarter of the portfolio and pushes expiries into the mid-to-late 2030s. Contracted coal volume for FY2027 is still lower at 211 million tonnes, down 20 million, with half the decline tied to a Hunter Valley contract that ended in June 2026.

Elsewhere, the company began hauling for Yilgarn Iron, AG River Energy and the BHP Copper South Australia road-to-rail conversion. In containerised freight, the CEVA vehicle logistics contract started in June 2026, and the NYK agreement is expected to move about 7,000 vehicles a year through Darwin, with auto wagons due from mid-2028.

Guidance and the Path to a New Access Undertaking

For FY2027, Aurizon guided to group underlying EBITDA of $1,725m to $1,775m and full-year dividends of 23.0 to 24.0 cents per share. It expects Network and Bulk earnings to rise and Coal earnings to fall, and it is targeting containerised freight to break even at the EBITDA level.

The regulatory calendar is just as important. The current Central Queensland coal access undertaking, UT5, expires on 30 June 2027. Aurizon has proposed UT5+ for ten years from 1 July 2027, and the Queensland Competition Authority's June 2026 draft decision supported the material part of the proposal, with final approval still required. The final cost of capital will be set from an averaging period within a nomination window running from 1 January to 30 April 2027.