Aurizon has rail freight contracts with CBH Group and Bunge. Photo: Aurizon

ASX-LISTED rail freight company, Aurizon, has reported record earnings for its bulk segment for the half ending December 31, in large part due to strong grain volumes in Western Australia and recovering levels in South Australia.

Aurizon hauls grain for CBH Group in WA, Bunge (formerly Viterra) in South Australia as well as smaller volumes for CHS Broadbent and Cargill in southern Queensland and New South Wales.

However, it was the CBH contract, secured in 2021 ahead of rival Watco, that drove higher grain volumes for Aurizon.

Using CBH and Aurizon estimates, about 12-13.2 million tonnes (Mt) of the recent WA crop could be hauled with CBH locomotives by Aurizon.

Aurizon managing director Andrew Harding said that the company’s bulk earnings before interest, taxes, depreciation and amortisation for the half was $117 million, up 39 percent on the prior period.

“The uplift was driven by higher volumes and the non-recurrence of prior year impacts particularly the provision of doubtful debts,” Mr Harding said.

Total bulk rail volumes for the half were 28.4Mt, 4pc higher than last year, driven by grain volumes as well as new iron ore customers and base metals.

“Volume growth was supported by increased base metal haulage including BHP Copper South Australia, new iron ore customers and additional grain haulage due to lower cancellations in the context of a record harvest in Western Australia.”

Grain, classified as ‘agricultural volumes’, makes up around 15pc of the bulk segment, the third-largest category after iron ore and ‘other minerals/ metals’.

Aurizon’s group executive for bulk and containerised freight George Lippiatt said WA’s record grain harvest was expected to contribute significantly to strong full-year results.

He said the bulk segment’s full-year earnings were expected to eclipse the previous years, in large part due to the large grain crop.

“[CBH have] just closed a harvest at 24 million tonnes, which congratulations to them and their growers, that’s a record,” Mr Lippiatt said.

“Most of that grain we will haul in the second half of FY26.

“The reason for that is that the harvest really occurs from…October through to January.

“So a lot of that grain is still in front of us, and we’re busy moving it in WA.

“About 50 to 55pc of the total harvest tends to go on rail in WA, the balance on road.”

Mr Lippiatt said Aurizon also hauls some of the SA crop which has come in significantly stronger than the 5.2Mt harvest seen in 2024-5.

“In terms of our other exposure…where South Australia has just closed a harvest of about 8Mt, so closer to an average harvest compared to a weaker one the year before.

“The majority of grain tends to go on road in South Australia.

“We do the balance for Bunge, used to be Viterra, and similar to WA, the majority of that grain that we will move for Bunge will go via the second half of FY26 rather than the first half.”

In the results, Aurizon also announced a five-year grain haulage extension was signed with Bunge.

Aurizon’s east coast grain volumes more than doubled compared with this time last year, reaching 289,000t for HY26.

This was compared to 141,000t in HY25.

These volumes are recorded under the company’s coal business segment.

Source: Aurizon

Overall financial results

Aurizon reported a 9pc rise in overall EBITDA to $891M, with revenue up 4pc to $2.1 billion and net profit after tax climbing 16pc to $237M.

“Today’s results underscore the strength of Aurizon’s two largest business units, Network and Coal and the continued growth of Bulk and Containerised Freight,” Mr Harding said.

“Revenue growth was driven by regulatory uplift and higher volumes, while disciplined cost control…further strengthened our position.

“This strong performance has flowed through to increases in our NPAT, free cash flow and earnings per share.

“We are also making good progress executing against key strategic objectives.

“Moving forward we remain focused on the continued disciplined execution of our growth strategy.

“This is underpinned by our confidence in the long-term growth and earnings potential for Aurizon in the coal and bulk commodities we transport including agriculture and critical minerals.”