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Listed freight operator Aurizon Holdings (ASX: AZJ) has lifted its first-half profit by 52 per cent from the previous corresponding period which was impacted by impairments and one-off items.
The coal hauler and railway owner says profit for the six months to December 31 had risen to $281.5 million, up from $185.8 million in the previous half year.
Aurizon CEO Andrew Harding says the company's simplified business unit structure had delivered improved operational and customer service performance.
"During the half, board and management have maintained a sharp focus on the key priorities highlighted to the market in 2017 and this is reflected in today's solid results," he said.
However, underlying EBIT (earnings before interest and tax) are down five per cent at $485.3 million and revenue was down three percent to $1.57 billion.
The company also warned that it will need to cut up to 20 million tonnes of high margin coal a year, valued around $4 billion, after a draft decision by the Queensland Competition Authority which will allow lower-than-expected earnings from the business over the five years to June 2021.
Aurizon also says it increased haulage tonnes in the coal business on the back of continuing strong demand for metallurgical and thermal coal, but warned that a competitive haulage market was putting some pressure on contract prices.
Aurizon reaffirmed its full-year outlook that underlying earnings will be in the range of $900 to $960 million and declared a partially-franked interim dividend of 14 cents per share.
Last week the company dropped its application for Northern Australian Infrastructure Facility funding because it had not been able to secure a commitment from any mining companies to run coal on a new railway.
At around 12.30pm AEDT, AZJ shares were up by just over three percent to $4.75.
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