Aurizon has handled reduced grain volumes during HY25. Photo: Aurizon

AUSTRALIA’S largest grain rail freight hauler, Aurizon, has reported Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) of $814 million in the half year ended December 31, down 4 percent from HY24.

A drop in earnings for the Bulk segment of 25pc due to lower grain volumes in Western Australia and South Australia was the key driver behind the group’s overall result.

The Network business EBITDA rose $9M to $495M in HY25 while the Coal segment recorded a drop in earnings of $19M to $264M due to higher operating costs and lower yields from the customer mix.

The Bulk segment recorded EBITDA of $84M, down from $112M in HY24, with lower grain volumes accounting for a $12M drop in earnings.

Bulk operations include the handling and delivery of commodities including: grain; fertiliser; livestock; iron ore; cement; bauxite; alumina, and base metals.

Aurizon’s key grain customers are: CBH Group, Viterra, CHS Broadbent, Cargill, Thallon Grain, and GrainCorp.

Across the Bulk business, Aurizon hauled 27.5 million tonnes during the half, down 19pc on the same period last year.

The Bulk Central segment, based at SA, fell 1.7Mt of which 700,000t was grain.

In WA, total volumes were down 5.3Mt, with grain accounting for 1.5Mt of this drop.

Aurizon managing director and chief executive officer Andrew Harding said stronger grain volumes were expected in the second half of the financial year due to positive harvest totals reported by WA’s CBH Group.

“Stronger grain volume (is) expected in the second half, with CBH Group receiving 20.3Mt from the Western Australian harvest that has just completed,” Mr Harding said.

“The harvest was the third-largest crop on record and 62pc higher than in the prior year,” Mr Harding said, adding that nearly all of WA’s most recent harvest was yet to be railed.

“The grain moved in the first half of the financial year is primarily the tail end of the prior harvest.

“From early November, the first railings generally begin from the new harvest.”

He said Aurizon’s grain freight volumes can fluctuate significantly from month to month.

“To get some scale of the variability of the volumes, we moved around 300,000t in September and our current run rate is around 1Mt a month.”

Aurizon chief financial officer and group executive strategy George Lippiatt said operating costs for the Bulk business jumped 6pc from HY24, with some of this increase attributed to the uneven grain volumes between the halves.

“Operating costs increased by $29M or 6pc due to increased costs to support customer growth, holding costs for train crew and maintenance in anticipation of higher grain volumes in the second half, and an increase in doubtful debt provisions,” Mr Lippiatt said.

Despite the lower volumes, Mr Harding said the company was “confident in the growth story for the bulk business” into the future.

He said grain volumes in WA and SA were typically less volatile than the eastern states, and had shown strong underlying growth over the past 10 years.

“West Australian grain production on a long-term trend continues to grow as…the croppable land has increased in the state.”

Aurizon has also revealed that it recently completed freight reviews for the Bulk systems in the east and west regions.

Mr Harding said the review had “identified cost and fleet optimisation opportunities that are currently being implemented”.

“This includes the movement of rolling stock between business units and regions.”

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