Aurizon Holdings Limited (ASX:AZJ) is an Australian rail-based freight Business transporting commodities and other freight across its national network, while also operating the Central Queensland Coal Network. Its FY26 result showed higher earnings, cash generation and dividends across the group. However, the FY27 outlook points to a more measured period, with lower expected Earnings from the Coal division offsetting anticipated improvement in Network, Bulk and Containerised Freight.

FY26 earnings move higher

Aurizon reported underlying EBITDA of A$1.724 billion for FY26, an increase of 9%. Underlying net profit after tax reached A$433 million, while statutory net profit was A$362 million.

Revenue from underlying operations was A$4.194 billion, while underlying EBIT reached A$985 million. Free Cash Flow was A$573 million, reflecting cash generated from operations after non-growth Capital Expenditure and interest payments under the company’s reporting definition.

Return on invested capital was 9.5% for FY26, while the ratio of net Debt to underlying EBITDA stood at 3.0 times.

The result reflected contributions from all three of Aurizon’s principal operating businesses, although the factors supporting earnings differed between Network, Coal and Bulk.

Network benefits from regulatory revenue

Network EBITDA increased by 8% during FY26, primarily due to higher regulatory revenue, partly offset by increased operating costs.

Aurizon Network operates the Central Queensland Coal Network, which provides rail infrastructure connecting Mining regions with export terminals. Earnings from this business are influenced by regulated access arrangements and approved Revenue settings.

The Network division remains an important source of group earnings because its financial performance is tied to the regulatory framework governing access to the infrastructure.

For FY27, Aurizon expects Network EBITDA to increase again. The company said the outlook reflects higher regulatory revenue, including the final recognition in underlying earnings of previous revenue-cap adjustments, although higher direct costs are expected to partly offset the benefit.

Coal earnings rise in FY26 but face pressure in FY27

Coal EBITDA increased by 2% in FY26. Aurizon attributed the improvement to price indexation, flat unit costs and net access and fuel benefits, partly offset by customer mix.

The company also continued renewing its contract portfolio during the year. In August 2026, Aurizon announced a new long-term rail-haulage agreement with BHP Mitsubishi Alliance covering Queensland mining operations.

The FY27 picture is different. Aurizon expects Coal EBITDA to decline compared with FY26 because of reduced contracted volumes and lower yield. Hauled volumes are nevertheless expected to remain broadly flat.

This distinction is important because contracted Volume and pricing arrangements can influence earnings even when the physical amount of coal transported changes relatively little.

Coal will therefore be one of the key areas affecting whether group earnings finish toward the lower or upper end of Aurizon’s FY27 guidance range.

Bulk records significant earnings growth

Bulk EBITDA increased by 38% during FY26, supported by customer growth and the absence of doubtful-debt provisions that affected the comparative period.

The division transports commodities including minerals, agricultural products and other bulk freight across Australia.

One of the operational developments during FY26 was the first full year of activities associated with the BHP Copper South Australia logistics contract. The project incorporates rail, terminal and broader logistics infrastructure.

Aurizon expects Bulk EBITDA to increase again in FY27 as newer customer contracts make a full-year contribution and some one-off costs do not recur.

That improvement is expected to be partly offset by lower iron ore volumes in South Australia.

The FY27 result will therefore depend on whether contributions from new customers are sufficient to absorb weaker volumes in parts of the existing portfolio.

Containerised Freight moves toward break-even

Aurizon has also continued developing its Containerised Freight business.

During FY26, the company secured additional customer commitments in areas including automobile transportation.

For FY27, Aurizon expects the broader Other segment to deliver higher EBITDA, with Containerised Freight targeted to reach break-even on an EBITDA basis.

Reaching that point would reduce the drag from the developing freight operation on group earnings. However, the result will depend on achieving sufficient volumes while managing the operating costs associated with expanding the network.

Dividend rises following FY26 result

Aurizon declared a final Dividend of 10.5 cents per share, 90% franked.

Combined with the interim distribution, this brought FY26 dividends to 23.0 cents per share, representing an increase of 46%.

The company also completed a A$250 million on-market share buyback during FY26.

For FY27, Aurizon expects total dividends of between 23.0 cents and 24.0 cents per share.

The guidance therefore points to a broadly similar level of distributions despite relatively limited expected growth in group EBITDA.

Future distributions will remain linked to earnings, capital requirements and the board’s assessment of the company’s financial position.

FY27 guidance points to broadly stable group earnings

Aurizon expects FY27 underlying EBITDA of between A$1.725 billion and A$1.775 billion.

The lower end of the range is close to the A$1.724 billion achieved in FY26, meaning the outlook does not assume a substantial increase in group earnings.

Instead, the composition of earnings is expected to change.

Network EBITDA is expected to rise on higher regulatory revenue. Bulk is also expected to improve, while Containerised Freight is expected to reach EBITDA break-even.

These gains are expected to be partly offset by lower Coal earnings.

Aurizon has also guided to non-growth capital expenditure of A$590 million to A$660 million, including approximately A$25 million of transformation capital. Growth capital expenditure is expected to range from A$70 million to A$120 million.

Capital expenditure will therefore remain an important Factor in cash generation during FY27.

Regulatory process remains important for Network

Aurizon Network’s proposed amendments to its Central Queensland Coal Network access arrangements remain under regulatory consideration during 2026.

The Queensland Competition Authority issued a draft decision in June 2026 on Aurizon Network’s proposed UT5 amendments. The regulatory process remains in progress, meaning the draft position should not be treated as the final outcome.

The proposed arrangements cover access and pricing for the Central Queensland Coal Network over an extended period.

Because Network contributes a substantial proportion of group earnings, the final regulatory settings can influence future revenue, capital returns and Investment decisions.

The regulator is also separately reviewing aspects of Aurizon Network’s annual reference tariffs and capital expenditure under the existing framework.

What could shape FY27 performance?

Aurizon enters FY27 with different earnings trends across its businesses.

Network is expected to benefit from higher regulatory revenue, while Bulk should receive fuller contributions from recently secured customer activity. Containerised Freight is expected to move toward break-even.

Coal presents the main counterweight, with lower contracted volumes and Yield expected to reduce divisional EBITDA even though hauled volumes are forecast to remain broadly stable.

Capital spending is another factor because the company expects substantial non-growth and growth expenditure during the year.

The regulatory process for the Central Queensland Coal Network will also remain relevant as the Queensland Competition Authority continues assessing the proposed access arrangements.

Aurizon’s FY27 performance will therefore depend less on a single business and more on whether growth in Network, Bulk and Containerised Freight can offset the expected decline in Coal earnings while the company manages its capital program.