Key Highlights

• For the year ended 30 June 2026, Aurizon reported Revenue of $4,194 million, up 6%.

• Underlying EBITDA rose 9% to $1,724 million, and underlying EBIT increased 17% to $985 million.

• Underlying net profit after tax was $433 million, up 24%, while statutory net profit was $362 million, up 19%.

• Underlying Earnings Per Share were 25.2 cents, and free Cash Flow rose 11% to $573 million.

How is Aurizon Holdings (ASX:AZJ) turning a coal-heavy freight Business into one with more growth options, and what do its latest numbers show? The rail operator's FY2026 result, released on 17 August 2026, showed higher earnings, a larger Dividend and lower gearing. Management's guidance for FY2027, however, points to a year of modest change rather than rapid expansion.

The FY2026 result in brief

For the year ended 30 June 2026, Aurizon reported revenue of $4,194 million, up 6%. Underlying EBITDA rose 9% to $1,724 million, and underlying EBIT increased 17% to $985 million. Underlying net profit after tax was $433 million, up 24%, while statutory net profit was $362 million, up 19%. All figures are in Australian dollars.

Underlying earnings per share were 25.2 cents, and free cash flow rose 11% to $573 million. Return on invested Capital improved by 1.4 percentage points to 9.5%.

Part of the gap between underlying and statutory profit reflects significant items, including a $54 million Impairment on the Coal NSW cash-generating unit.

What Aurizon does and how it earns revenue

Aurizon is an Australian rail freight operator that also manages the Central Queensland Coal Network. Its earnings come from three main areas.

The Network segment operates the Central Queensland Coal Network, where revenue is largely set by a regulator-approved framework. The Coal segment hauls coal for Mining customers under contracts. The Bulk segment carries commodities such as iron ore and other minerals, and the company is also building a smaller containerised freight business.

Segment EBITDA moved differently in FY2026. Network rose 8%, helped by higher regulatory revenue, and Coal rose 2% on price indexation and flat unit costs. Bulk climbed 38%, supported by customer growth and the absence of prior-year doubtful Debt provisions. The jump partly reflects a weak comparison base.

Dividends, buy-back and balance sheet

The total FY2026 dividend was 23.0 cents per share, compared with 15.7 cents the year before. The final dividend of 10.5 cents was 90% franked, was paid on 23 September 2026, and follows a payout of 90% of underlying net profit.

Aurizon also completed a $250 million on-market buy-back. Daily buy-back notices lodged with the ASX during October and November 2026 show on-market purchases continuing.

Net debt to EBITDA was 3.0 times, down from 3.3 times a year earlier. Growth Capital Expenditure was $146 million, against $107 million in FY2025, and there were no acquisitions.

Outlook and FY2027 guidance

Aurizon expects FY2027 underlying EBITDA of $1,725 million to $1,775 million, which is close to the FY2026 outcome. It guides to a full-year dividend of 23.0 to 24.0 cents per share. Non-growth capital expenditure is expected to be $590 million to $660 million, including about $25 million of transformation spending, with growth capital of $70 million to $120 million.

By segment, the company expects Network and Bulk EBITDA to be higher and Coal EBITDA to be lower because of reduced contracted volumes and yield. Containerised Freight is expected to break even at the EBITDA level. Coal haulage volumes are forecast to be broadly flat.

Guidance assumes no significant disruptions to Supply chains or customers.

Sector conditions and competitive position

Aurizon's Coal and Network businesses depend on Queensland and New South Wales mining volumes, which in turn reflect global Demand for coal. Contracts and regulated pricing soften the direct exposure to Commodity prices, but the Volume outlook still matters, as the lower contracted volumes embedded in FY2027 guidance show.

In Bulk, the company says it is targeting growth in agriculture, critical minerals and bulk transport more broadly. Rail competes with road haulage and with other rail operators, so winning new contracts depends on service reliability and price. The company has pointed to containerised freight commitments from CEVA Logistics and NYK automobile volumes as early wins in the newer areas.

Aurizon also reported that more than a quarter of its coal contract book has been recontracted, including a new long-term rail haulage contract with BMA. That gives some visibility, although renewal terms for the rest of the book remain a point to watch.

The regulatory question

A key item is the UT5+ Access Undertaking for the Central Queensland Coal Network, which sets how the network can be priced and accessed. The Queensland Competition Authority issued a draft decision in June 2026, and final approval is still required. The access and pricing period starts at the beginning of FY2027, so the final outcome influences Network revenue visibility and the returns the company can earn on that asset.

Network earnings in FY2027 also include the final recognition of prior-year revenue cap adjustments. Aurizon noted a $27 million revenue timing difference in the Network segment, a reminder that regulated revenue can move between periods.

Risks and upcoming developments

The main uncertainties are as follows.

• Regulatory risk, including the final UT5+ decision from the Queensland Competition Authority.

• Coal volume and Yield risk, with lower contracted volumes expected in FY2027 and long-term structural questions about thermal coal demand.

• Lower South Australian iron ore volumes, which weigh on the Bulk outlook.

• Cost pressures, including network operating costs, customer start-up costs and net fuel under-recovery.

• Execution risk in building containerised freight and other new markets.

• Asset impairments, such as the charge taken on Coal NSW this year.

Shareholders voted on all resolutions at the Annual General Meeting on 22 October 2026, and all were passed. Next on the calendar are the final UT5+ decision, ongoing buy-back disclosures, and the half-year result for FY2027. Aurizon also reported a lower total recordable injury frequency rate, and safety performance remains an area to monitor.