Aurizon has reaffirmed its FY2026 guidance of group underlying EBITDA of $1,680m to $1,750m and full-year dividend of 22 to 23 cents per share, providing reassurance despite full-year network volumes tracking below regulatory assumptions. The key reassurance lies in management’s clarification that despite Central Queensland Coal Network volumes reaching 173.5 million tonnes for the first ten months, which is expected to trail the regulatory assumption of 221 million tonnes, the entire Allowable Revenue will be recognised in FY2026 underlying revenue and earnings. This clarity removes significant uncertainty around earnings quality.
Volume trends across Aurizon’s diversified business portfolio demonstrate underlying demand momentum despite operational headwinds. Coal volumes increased 1.3 million tonnes year-on-year, or 0.8 percent, to 158.4 million tonnes, even accounting for adverse weather impacts on customer mine production in Central Queensland during the March 2026 quarter. Bulk volumes expanded by 3.0 million tonnes, or 6.7 percent, reaching 48.4 million tonnes, driven by higher grain volumes and the commencement of the BHP Copper South Australia contract. Container freight showed the strongest growth momentum, with Twenty-foot Equivalent Units rising 22.5 thousand units, or 13.2 percent, to 194.0 thousand units. These gains were partially offset by third-party track outages and weather disruptions, making the underlying demand picture more encouraging than headline volumes suggest.
A temporary fuel cost headwind has emerged from timing mismatches between incurring diesel expenses and recovering them through customer contracts. Aurizon’s diesel consumption is primarily related to bulk and container freight operations and approximately half of coal rail haulage, with the remainder using electric traction. Whilst the majority of haulage contracts feature monthly fuel adjustment mechanisms aligned to international benchmark pricing, some bulk business contracts adjust quarterly, creating a timing lag. This has resulted in an estimated negative EBITDA impact of approximately $10 million in FY2026. Management has characterised this as a timing issue that will be recovered through future quarterly adjustments as fuel prices decline, though the near-term earnings impact is material.
The reaffirmed guidance demonstrates management confidence in the underlying business despite weather disruptions, fuel cost exposure, and full-year volume shortfalls relative to regulatory assumptions. The multi-business diversification is working in the company’s favour, with volume growth evident across coal, bulk and container segments. Investors should monitor whether the fuel adjustment cycle works through as expected during the remainder of FY2026 and track the ramp trajectory of the BHP Copper contract, which represents new revenue exposure. This announcement has been classified as price sensitive and flagged as material by the ASX.
View the full ASX announcement (PDF)
About Aurizon Holdings Limited (ASX: AZJ)
Aurizon Holdings Limited is an Australian rail freight operator that transports more than 250 million tonnes of commodities annually, connecting miners, primary producers and industry with domestic and international markets. The company operates and manages two major rail networks: the Central Queensland Coal Network (2,670 kilometers) and the South Australia and Northern Territory Network (2,100 kilometers). Its operations span coal, bulk commodities and other freight services.
If you would like to discuss this announcement or how it might affect your portfolio, request a callback or call us on 1300 889 603.
