Aurizon Cuts Earnings Guidance After Cyclone

   By Robb M. Stewart 
 

MELBOURNE, Australia--Rail operator Aurizon Holdings Ltd. (AZJ.AU) lowered its earnings guidance for the financial year as it tallies the cost on its coal-haulage operations from a fierce tropical storm that hit eastern Australia last month.

Three of Aurizon's four coal lines have reopened to trains and are operating under restrictions that have reduced capacity, while the fourth system is set to resume on April 26 after suffering significant damage at several sites, the company said Tuesday.

Tropical Cyclone Debbie hit the coast of Queensland on March 28, bringing with it high winds, heavy rainfall and flooding across a region that extended from the state into northern New South Wales to the south.

The storm is expected to have reduced earnings before interest and tax by between 100 million Australian dollars (US$75.9 million) and A$115 million for the year through June, which will mean annual earnings of between A$800 million and A$850 million where Aurizon had previously forecast A$900 million-A$950 million. The company recorded ebit of A$343 million in fiscal 2016.

Cyclone Debbie, the most powerful storm in the region since Cyclone Yasi made landfall in February 2011, forced the closure of many port and mining operations in a state that accounts for about 60% of global shipments of coking coal.

Aurizon, which hauls coal for miners including BHP Billiton Ltd. (BHP.AU) and Glencore PLC (GLEN.LN), said coal hauled on its network was expected to be reduced by 12 million to 14 million metric tons for the year. Some A$70 million-A$80 million of the anticipated cost would be recovered through regulatory processes in future years, it added.

Write to Robb M. Stewart at [e-mail]

(END) Dow Jones Newswires

April 18, 2017 00:04 ET (04:04 GMT)

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