Aurizon wants to carve 7 days off freight trip from Shanghai

afr.com:

Aurizon shares fell 5 per cent on Tuesday as the country’s largest ASX-listed rail freight company said earnings for the 2023 financial year would come in at the lower end of forecasts, which it had already downgraded.

The group, which blamed the lower earnings on “prolonged wet weather, mine production issues and some labour shortages impacting the March quarter”, updated its guidance at an investor presentation during which it outlined a new strategy to maximise the use of the Port of Darwin.

Andrew Harding is Aurizon’s chief executive. Dan Peled

That would enable the company to use existing but “underdeveloped” infrastructure to unload container ships – instead of routing them to busy port facilities in Brisbane, Sydney and Melbourne – and transport them by rail. Eventually, the route would bypass Melbourne altogether.

The “more direct link and shorter sail times from Asia with faster rail linehaul” could mean a saving of seven days from origin to destination, the company told its investors in the presentation.

Still, the strategy was not enough to outweigh investor disquiet about its earnings. Shares fell 5 per cent, or 20¢, to close at $3.80 on Tuesday. They have fallen just over 2 per cent over the last 12 months.

The company said earnings would be at the lower end of an earlier forecast of between $1.42 billion and $1.47 billion. However, it had already downgraded expectations in February, having previously suggested earnings would be up to $1.55 billion.

The company provided guidance for this financial year, for which it expects EBITDA of between $1.59 billion and $1.68 billion, in line with market forecasts of around $1.636 billion. But it was below the expectations of RBC Capital Markets broker Owen Birrell,