Aurizon has scrapped its plans to sell a stake in its Queensland rail network. This decision comes as the company announced a 1 per cent increase in interim net profit, reaching $235 million. Consequently, Aurizon has raised its full-year dividend forecast. Aurizon is Australia’s largest rail freight operator and a top 100 ASX-listed company. It provides integrated freight and logistics solutions across an extensive national network.
Aurizon chief executive Andrew Harding stated that the company has decided to maintain its current integrated model. This model includes the 2670-kilometre central Queensland coal network. Harding said that a comprehensive review, aided by external consultants, evaluated various structural options for the network. These options included monetisation and demerger scenarios. The review concluded that retaining full ownership of the network was the most beneficial option for long-term shareholder value.
Investor sentiment also played a role in the decision. Some existing Aurizon investors were against the proposed sale and demerger. Potential new investors were hesitant about investing in a fossil fuel-exposed asset. Aurizon now anticipates a full-year dividend of 22¢ to 23¢ per share, an increase from the previous forecast of 19¢ to 20¢ per share. The company will distribute an interim dividend of 12.5¢ per share, up from 9.2¢ per share the previous year.
Furthermore, the rail group reaffirmed its full-year forecast for underlying EBITDA, expecting it to be between $1.6 billion and $1.75 billion. Aurizon also increased its share buyback program by $100 million, bringing the total buyback amount to $250 million.
