Aurizon's Stellar Financial Year
Aurizon's FY2026 Results Show Strong Growth in Earnings, Dividends, and Market Outperformance
Key Points
Bulk EBITDA rose 38% in FY2026, lifting earnings in the Bulk division alongside improvements in Network and Coal.
Containerised freight volumes grew 25% in FY2026, with a clear pathway to break-even on an EBITDA basis in FY2027.
The UT5+ Network access undertaking remains in a ten-year draft-approval process, with the final outcome due in the coming year.
Aurizon's shares have outperformed the ASX 200 by about 25% over the past 12 months, reflecting strong earnings and dividend momentum.
Analysts on TipRanks currently rate AZJ as a Sell with a target price of A$3.51.
Aurizon Holdings (ASX:AZJ) posted a standout full year, with underlying net profit after tax jumping 24% to $433 million for FY2026, according to Kalkine. The rail freight giant also lifted its full-year dividend by 46% to 23 cents per share, rewarding shareholders after a year of broad earnings growth across all three of its divisions.
Underlying EBITDA — earnings before interest, tax, depreciation, and amortisation — rose 9% to $1.724 billion, up from $1.576 billion in FY2025, Kalkine reported. Aurizon's shares have outperformed the ASX 200 index by about 25% over the past 12 months, reflecting strong earnings and dividend momentum.
Bulk and Network Divisions Drive Earnings Surge
The Bulk division was the standout performer, with EBITDA rising 38% in FY2026, according to Kalkine. That growth came alongside a 10% rise in Aurizon Network's adjusted EBIT, which climbed from $582.8 million to $640 million. Network revenue grew 4% for the year.
The Network division is Australia's largest coal rail network, Kalkine noted. Its improved earnings reflect higher access charges and better asset use. Together, the Network and Bulk divisions helped offset any pressure in the Coal segment and drove the group's overall profit higher.
60 Million Tonnes of Coal Recontracted Into the 2030s
Aurizon recontracted more than 60 million tonnes of coal volume since July 2025, extending customer agreements well into the 2030s. Coal remains a core part of the business, even as the company expects the Coal division to moderate slightly in FY2027.
Containerised freight is emerging as a key growth area. Volumes grew 25% in FY2026, Grafa reported. Aurizon expects that division to reach break-even on an EBITDA basis in FY2027. New vehicle logistics contracts with CEVA and NYK are part of that push.
Debt Steady as UT5+ Approval Process Drags On
Aurizon's net debt sits at around $5.2 billion. Gearing is stable near 57%, and net debt to EBITDA is about 3.0 times. The company says its balance sheet is in a manageable position as it continues to invest in productivity and freight expansion.
One key uncertainty remains the UT5+ Network access undertaking. This is a regulatory process that sets the terms under which other operators can use Aurizon's coal rail network. The draft approval process has been running for ten years, TipRanks noted, with a final outcome expected in the coming year.
FY2027 Guidance Points to Steady Growth, Analysts Cautious
For FY2027, Aurizon is guiding underlying EBITDA of $1.725 billion to $1.775 billion — roughly flat to slightly higher than FY2026. The company also expects dividends of 23 to 24 cents per share, signalling continued shareholder returns, Kalkine reported.
Despite the strong results, analysts on TipRanks currently rate AZJ as a Sell, with a target price of A$3.51. That suggests some on Wall Street and in the analyst community think the recent share price rally may have gone too far, even as the company's fundamentals remain solid.
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