Aurizon Holdings Ltd. · ASX:AZJ
Aurizon — H1 2021 Earnings Presentation
81 slides from Aurizon's earnings presentation, Feb 15, 2021
Slide 1: 1HFY2021 Results
15 February 2021 1HFY2021 Results Andrew Harding – Managing Director & CEO George Lippiatt – CFO & Group Executive Strategy
Slide 2: Disclaimer
1HFY2021 RESULTS Disclaimer NO RELIANCE ON THIS DOCUMENT NO OFFER OF SECURITIES This document was prepared by Aurizon Holdings Limited (ACN 146 335 622) (referred to as Nothing in this presentation should be construed as a recommendation of or an offer to sell or “Aurizon” which includes its related
Slide 3: Safety performance
1HFY2021 RESULTS Safety performance TRIFR results driven by low-severity strain injuries with LTIFR improving 30% TOTAL RECORDABLE INJURY FREQUENCY RATE (TRIFR)1 RAIL PROCESS SAFETY (RPS) +25% 5.08 -4% 12.38 Incidents per million train kilometres travelled 4.66 4.74 Incidents per million person-hour
Slide 4: Performance overview
Performance overview Andrew Harding Managing Director & CEO
Slide 5: 1HFY2021 highlights
1HFY2021 RESULTS PERFORMANCE OVERVIEW 1HFY2021 highlights1 Increase to shareholder distributions with dividend per share up 5%. EBIT flat despite soft coal volume environment with strong Bulk performance and $49m retrospective WIRP fee. GROUP EBIT STATUTORY NPAT ROIC FREE CASHFLOW $454m $267m 10.8%
Slide 6: Coal – Market update
1HFY2021 RESULTS PERFORMANCE OVERVIEW Coal – Market update Although steel production has resumed to a pre-COVID level, a challenging trade environment with China is impacting near term export volume CRUDE STEEL PRODUCTION: KEY NATIONS1 › Global steel production – returned to pre-COVID levels, Year-o
Slide 7: Coal – Business update
1HFY2021 RESULTS PERFORMANCE OVERVIEW Coal – Business update Haulage volumes expected to grow in FY2022, increasing contract utilisation. Operational efficiencies designed to mitigate revenue pressures CUSTOMER UPDATE OPERATIONAL EFFICIENCIES › FY2021 haulage volume outlook of 200-210mt (prev. 210-
Slide 8: Bulk update
1HFY2021 RESULTS PERFORMANCE OVERVIEW Bulk update Strong performance continues with revenue up 8% from higher volumes. Aurizon Port Services expands product offering with acquisition of ConPorts in Newcastle CUSTOMER UPDATE REVENUE BY COMMODITY2 › CBH – short-term contract for the haulage of grain i
Slide 9: Network update
1HFY2021 RESULTS PERFORMANCE OVERVIEW Network update WIRP fees commenced during the period, with potential upside from appeal of Expert's Determination. UT5 capacity assessment expected September 2021 quarter WIGGINS ISLAND RAIL › Queensland Court of Appeal dismissed customers' appeal on PROJECT (WI
Slide 10: Other matters
1HFY2021 RESULTS PERFORMANCE OVERVIEW Other matters Progress made in court cases SALE OF ACACIA RIDGE › 8 December 2020: High Court dismissed the ACCC's application for special leave clearing way for TERMINAL the sale ($170m proceeds remaining) › 2 February 2021: Foreign Investment Review Board (FIR
Slide 11: Financial Performance
1HFY2021 Financial Performance George Lippiatt CFO & Group Executive Strategy
Slide 12: Key financial highlights
1HFY2021 RESULTS FINANCIAL PERFORMANCE Key financial highlights1 EBIT performance driven by Bulk (volume growth) and Network (WIRP) offsetting lower Coal (volumes) $m 1HFY2021 1HFY2020 Variance 2HFY2020 › Revenue decrease from Coal (lower volumes) and Other (sale of Rail Grinding Revenue 1,498 1,529
Slide 13: Coal
1HFY2021 RESULTS FINANCIAL PERFORMANCE Coal EBIT impacted by lower volumes $m 1HFY2021 1HFY2020 Variance 2HFY2020 Revenue Above rail 584 629 (7%) 632 › Volumes down 4% impacted by lower end market demand and customer specific Track access 230 259 (11%) 254 maintenance and production issues Other 1 1
Slide 14: Bulk
1HFY2021 RESULTS FINANCIAL PERFORMANCE Bulk Revenue growth driving strong EBIT performance $m 1HFY2021 1HFY2020 Variance 2HFY2020 Revenue Revenue 322 297 8% 312 › Revenue higher through new contract growth Access costs (48) (65) 26% (46) Costs Operating costs (200) (179) (12%) (209) › Higher operati
Slide 15: Network
1HFY2021 RESULTS FINANCIAL PERFORMANCE Network EBIT growth from commencement of WIRP fees offsetting lower volumes $m 1HFY2021 1HFY2020 Variance 2HFY2020 Revenue Track access 569 565 1% 567 › Commencement of WIRP fees including retrospective amount offset by access Services & other 24 31 (23%) 26 re
Slide 16: Cashflow and shareholder returns
1HFY2021 RESULTS FINANCIAL PERFORMANCE Cashflow and shareholder returns Consistent free cash flow generation has delivered over $4b in shareholder distributions over the past six years including $1.3b in buy-backs, with dividends maintained at 100% of NPAT FREE CASH FLOW 1 ($M) CUMULATIVE SHAREHOLDE
Slide 17: Capital expenditure
1HFY2021 RESULTS FINANCIAL PERFORMANCE Capital expenditure Capital expenditure forecast for FY2021 remains at $500m - $550m CAPITAL EXPENDITURE1 ($M) › Capital expenditure guidance for FY2021 remains at 532 527 $500m - $550m ~500-550 495 490 › FY2021 Growth capex relates to wagons for Queensland Coa
Slide 18: Funding update
1HFY2021 RESULTS FINANCIAL PERFORMANCE Funding update Consistent with strategy, increase in leverage continues with surplus capital deployed to capital management. Re-financing activities to reduce interest costs over time 1HFY2021 FUNDING ACTIVITY KEY DEBT METRICS 1HFY2021 1HFY2020 › Network – issu
Slide 19: Outlook & Key Takeaways
Outlook & Key Takeaways Andrew Harding Managing Director & CEO
Slide 20: FY2021 outlook
1HFY2021 RESULTS OUTLOOK & KEY TAKEAWAYS FY2021 outlook Group EBIT guidance now $870m – $910m KEY ASSUMPTIONS › Coal ‒ Volumes revised to 200-210mt (from 210-220mt) based on current market conditions including a challenging China trade environment › Network ‒ CQCN volumes will be lower than QCA appr
Slide 21: Strategy delivers results
1HFY2021 RESULTS OUTLOOK & KEY TAKEAWAYS Strategy delivers results Aurizon’s strategy enables the delivery of shareholder value Achieve Execute Ongoing De-risk near fundamental Optimal legal Pursue Business Freight operational term Above regulatory and capital growth in Structure Review efficiency R
Slide 22: Contact and further information
Contact and further information Chris Vagg James Coe Head of Investor Relations & Group Treasurer Manager Market Intelligence & Investor Relations +61 7 3019 9030 +61 7 3019 7526 Chris.Vagg@aurizon.com.au James.Coe@aurizon.com.au ASX: AZJ US OTC: AZNNY
Slide 23: Additional Information: ESG
Additional Information: ESG
Slide 24: Sustainability
1HFY2021 RESULTS ADDITIONAL INFORMATION Sustainability 2020 was the fourth year of TCFD disclosure for Aurizon Reporting Approach › Aurizon takes a direct approach to reporting environmental, social and governance (ESG) disclosures with the publication of the annual Sustainability Report › In Septem
Slide 25: Sustainability
1HFY2021 RESULTS ADDITIONAL INFORMATION Sustainability Aurizon’s FY2020 sustainability performance COMMUNITY STAKEHOLDER VALUE $1.3 billion $400 million 262 million $408 million spent with suppliers, a large FY2020 share buyback tonnes of commodities hauled in taxes collected and paid1 percentage of
Slide 26: Climate Strategy and Action Plan
1HFY2021 RESULTS ADDITIONAL INFORMATION Climate Strategy and Action Plan Aurizon is committed to a long-term target of net-zero operational emissions (scope 1 and 2) by 2050. Our Climate Strategy and Action Plan is built on the following three key pillars We will continue to assess and enhance our A
Slide 27: Climate Strategy and Action Plan
1HFY2021 RESULTS ADDITIONAL INFORMATION Climate Strategy and Action Plan We are driving operational decarbonisation through our Tracking Towards Net-Zero Operational Emissions initiatives 2020-2030 2030-2050 Climate Strategy and Action Plan Implementation Technology Pathway Minimising our Operationa
Slide 28: Climate Strategy and Action Plan
1HFY2021 RESULTS ADDITIONAL INFORMATION Climate Strategy and Action Plan The majority of our emissions are associated with the consumption of energy (fuel and electricity) in the day-to-day operation of our locomotive fleet AURIZON’S GREENHOUSE GAS PROFILE AURIZON’S LOCOMOTIVE EMISSIONS INTENSITY PE
Slide 29: Australian Export Coal Demand
1HFY2021 RESULTS ADDITIONAL INFORMATION Australian Export Coal Demand Australia coal export volume is driven by steel-intensive growth in India and prolonged thermal electricity generation in Asia, supporting coal export growth of ~1%pa over the next decade METALLURGICAL COAL THERMAL COAL › Metallur
Slide 30: Australian Coal Summary
1HFY2021 RESULTS ADDITIONAL INFORMATION Australian Coal Summary CY2020 Export CY2020 All Coal Export (By Destination) CY2020 All Coal Export (By Port) Export Revenue 104mt 158mt *Port Kembla to September 2020 only. $55b 371mt 74mt 101mt Total Production 53mt State Split 28% 46mt 71mt 20% 31mt 40mt 4
Slide 31: Global Metallurgical (Coking) Coal Landscape
1HFY2021 RESULTS ADDITIONAL INFORMATION Global Metallurgical (Coking) Coal Landscape Around one-third of global metallurgical coal demand is met through the global traded export market with Australia commanding over half of this market 2019, million tonnes Import Market: Split 1,007mt 670mt 95mt Chi
Slide 32: Future of Coal | Metallurgical Coal
1HFY2021 RESULTS ADDITIONAL INFORMATION Future of Coal | Metallurgical Coal Driven by urbanisation and infrastructure development, the opportunity remains for India and Southeast Asian nations to increase steel usage INDIA: CRUDE STEEL PRODUCTION AND COKING (METALLURGICAL) APPARENT STEEL USE (CRUDE
Slide 33: Metallurgical Coal Market | Australia
1HFY2021 RESULTS ADDITIONAL INFORMATION Metallurgical Coal Market | Australia Driven by quality, cost-competitiveness and proximity to Asian markets, Australia holds a unique position in the seaborne market. AUSTRALIA: METALLURGICAL COAL EXPORT VOLUME AND PRICE1 METALLURGICAL COAL CASH COSTS (US$/t,
Slide 34: Global Thermal (Steam) Coal Landscape
1HFY2021 RESULTS ADDITIONAL INFORMATION Global Thermal (Steam) Coal Landscape Over 80% of global thermal coal demand is produced and consumed within country. Australia holds around one-fifth of the global trade market that is dominated by Asian demand 2019, million tonnes 6,175mt 5,092mt Import Mark
Slide 35: Future of Coal | Thermal Coal
1HFY2021 RESULTS ADDITIONAL INFORMATION Future of Coal | Thermal Coal Although it is recognised that thermal coal generation will reduce as a percentage of global energy, Asia is projected to use coal-fired generation assets for an extended period PER CAPITA ELECTRICITY CONSUMPTION VS. PER CAPITA IN
Slide 36: Thermal Coal Market | Australia
1HFY2021 RESULTS ADDITIONAL INFORMATION Thermal Coal Market | Australia Australia’s thermal coal competitiveness is driven by coal quality characteristics and geographic proximity to Asia. Around 98% of Australian exports are destined for Asia AUSTRALIA: THERMAL COAL EXPORT VOLUME AND PRICE1 THERMAL
Slide 37: Additional Information: Group
Additional Information: Group
Slide 38: Aurizon 1HFY2021 Summary
1HFY2021 RESULTS ADDITIONAL INFORMATION Aurizon 1HFY2021 Summary ABOVE RAIL (AURIZON OPERATIONS) BELOW RAIL (NETWORK) Coal Bulk Network Aurizon’s Coal business provides a critical Aurizon’s Bulk business provides integrated Network refers to the business of Aurizon supply chain link for Australia’s
Slide 39: Aurizon's rail haulage operations
1HFY2021 RESULTS ADDITIONAL INFORMATION Aurizon’s rail haulage operations KEY OPERATIONAL STATISTICS COMMODITIES Coal and bulk freight ROLLINGSTOCK ~500 active locomotives OPERATIONAL FOOTPRINT ~40 operational sites PEOPLE More than 4,600 full-time employees WAGONS 11,000+ active wagons 39
Slide 40: Aurizon's vision, purpose, values and strategic levers
1HFY2021 RESULTS ADDITIONAL INFORMATION Aurizon’s vision, purpose, values and strategic levers Execution against the three strategic levers is aimed at driving differentiation, competitive advantage and sustainable performance VISION PURPOSE STRATEGIC LEVERS Accelerate cost competitiveness of The fi
Slide 41: Quarterly tonnes: December 2020
1HFY2021 RESULTS ADDITIONAL INFORMATION Quarterly tonnes: December 2020 Quarter Ending Financial Year To Date Dec-19 Mar-20 June-20 Sep-20 Dec-20 Variance1 Dec-20 Dec-19 Variance1 Coal volumes (mt) CQCN 37.7 37.0 38.8 34.7 36.5 (3%) 71.2 74.3 (4%) NSW & SEQ 15.8 14.8 17.0 15.3 15.3 (3%) 30.6 32.0 (4
Slide 42: Enterprise Agreements
1HFY2021 RESULTS ADDITIONAL INFORMATION Enterprise Agreements # Staff Headline Increases Term Enterprise Agreement Covered Expiry Date Status (years) (approx.) Year 1 Year 2 Year 3 Year 4 WA Rollingstock Maintenance 100 4 10 May 2021 1.0% 1.5% 1.75% 1.75% Complete WA Rail Operations 420 4 30 June 20
Slide 43: Prioritisation of capital
1HFY2021 RESULTS ADDITIONAL INFORMATION Prioritisation of capital CAPITAL ALLOCATION HIERARCHY 1 2 3 4 DETERMINE NON GROWTH SURPLUS AVAILABLE DIVIDENDS CAPITAL CAPITAL CAPITAL › Ongoing operating › Sustaining and › Within 70-100% › Capital management cashflows transformation payout ratio opportuniti
Slide 44: Underlying group EBIT bridge ($m)
1HFY2021 RESULTS ADDITIONAL INFORMATION Underlying group EBIT bridge1 ($m) $456m $454m $8m $9m $35m $17m 1HFY2020 Coal Bulk Network Other 1HFY2021 1. Continuing operations Note: Due to rounding, the sum of components may not equal the corresponding total. 44
Slide 45: Underlying EBIT by business unit ($m)
1HFY2021 RESULTS ADDITIONAL INFORMATION Underlying EBIT1 by business unit ($m) 1HFY2021 1HFY2020 Variance 2HFY2020 Coal 170.9 205.8 (17%) 204.8 Bulk 60.5 43.7 38% 46.2 Network 241.3 232.2 4% 236.6 Other (18.5) (26.1) 29% (34.2) EBIT 454.2 455.6 - 453.4 1. Continuing operations Note: Due to rounding,
Slide 46: Balance sheet summary ($m)
1HFY2021 RESULTS ADDITIONAL INFORMATION Balance sheet summary ($m) 31 December 2020 30 June 2020 31 December 2019 Assets classified as held for sale 67.2 65.1 74.7 Other current assets 518.8 650.2 607.8 Total current assets 586.0 715.3 682.5 Property, plant and equipment (PP&E) 8,526.0 8,537.1 8,499
Slide 47: Reconciliation of borrowings
1HFY2021 RESULTS ADDITIONAL INFORMATION Reconciliation of borrowings $m Commentary Total debt including working capital facility 3,576.8 Borrowings on a cash basis Reconciliation to Financial Statements Add/(less): Transaction costs directly attributable to borrowings are capitalised Capitalised tra
Slide 48: Significant adjustments ($m)
1HFY2021 RESULTS ADDITIONAL INFORMATION Significant adjustments ($m) 1HFY2021 1HFY2020 Variance 2HFY2020 Continuing operations – Net gain on sale of Rail Grinding - 105.4 - - (before tax) 48
Slide 49: Redundancy cost information
1HFY2021 RESULTS ADDITIONAL INFORMATION Redundancy cost information › Redundancy costs since IPO have been included in Redundancy costs Redundancy costs underlying EBIT as well as classified as a significant item Year included in underlying classified as EBIT ($m) Significant items ($m) › Aurizon cl
Slide 50: Dividend history
1HFY2021 RESULTS ADDITIONAL INFORMATION Dividend history 30.0c 100% 27.1 27.4 90% 25.0c 24.6 24.0 23.8 80% 22.5 13.1 13.7 70% Amount (Cents) Per Share 20.0c 13.3 8.9 60% Payout Ratio1 16.5 12.4 13.9 15.0c 50% 12.3 8.5 40% 10.0c 8.3 30% 8.2 13.6 14.0 13.7 14.4 4.6 11.3 11.4 20% 5.0c 10.1 8.0 10% 3.7
Slide 51: Additional information: Coal
Additional information: Coal
Slide 52: Coal – Central Queensland Coal Network
1HFY2021 RESULTS ADDITIONAL INFORMATION Coal – Central Queensland Coal Network 52 Includes all mines in CQCN
Slide 53: Coal – New South Wales and South East Queensland
1HFY2021 RESULTS ADDITIONAL INFORMATION Coal – New South Wales and South East Queensland 53 Includes all mines in NSW & SEQ
Slide 54: Coal operating metrics
1HFY2021 RESULTS ADDITIONAL INFORMATION Coal operating metrics1 1HFY2021 1HFY2020 Variance 2HFY2020 Total tonnes hauled (m) 101.8 106.3 (4%) 107.6 Contract utilisation 82% 86% (4ppt) 87% Total NTK (b) 23.7 24.8 (4%) 25.2 Average haul length (km) 233 233 - 234 Total revenue / NTK ($/’000 NTK) 34.4 35
Slide 55: Coal tonnes (mt) by system
1HFY2021 RESULTS ADDITIONAL INFORMATION Coal tonnes (mt) by system 1HFY2021 1HFY2020 Variance 2HFY2020 CQCN Newlands 9.1 10.5 (13%) 10.3 Goonyella 28.7 29.1 (1%) 30.8 Blackwater 26.6 28.4 (6%) 27.2 Moura 6.8 6.3 8% 7.5 Total CQCN 71.2 74.3 (4%) 75.8 NSW & SEQ West Moreton 2.2 3.2 (31%) 2.3 Hunter Va
Slide 56: Coal contract portfolio
1HFY2021 RESULTS ADDITIONAL INFORMATION Coal contract portfolio AURIZON COAL CONTRACT VOLUME EXPIRY BY YEAR1 COAL CONTRACT PORTFOLIO EXPIRY1 AS AT 31 DECEMBER 2020 AS AT 31 DECEMBER 2020 60 18% 0-3 years 3-7 years 56% 7+ years 45 26% Million tonnes per annum (Mtpa) 30 FORECAST COAL CONTRACTED VOLUME
Slide 57: Additional Information: Bulk
Additional Information: Bulk
Slide 58: Bulk operations – Queensland
1HFY2021 RESULTS ADDITIONAL INFORMATION Bulk operations – Queensland 58
Slide 59: Bulk operations – New South Wales, Victoria and South Australia
1HFY2021 RESULTS ADDITIONAL INFORMATION Bulk operations – New South Wales, Victoria and South Australia 59
Slide 60: Bulk operations – Western Australia
1HFY2021 RESULTS ADDITIONAL INFORMATION Bulk operations – Western Australia 60
Slide 61: Bulk – Australia Capital & Exploration Expenditure
1HFY2021 RESULTS ADDITIONAL INFORMATION Bulk – Australia Capital & Exploration Expenditure CAPITAL EXPENDITURE: METAL ORE MINING1 EXPLORATION EXPENDITURE: IRON ORE A$6.0b A$150m +24% +8% A$4.0b A$100m A$2.0b A$50m A$0.0b A$0m Dec- Jun- Dec- Jun- Dec- Jun- Dec- Jun- Dec- Jun- Dec- Jun- Dec- Jun- Dec-
Slide 62: Bulk commodities: Supply growth
1HFY2021 RESULTS ADDITIONAL INFORMATION Bulk commodities: Supply growth GLOBAL AND AUSTRALIA SUPPLY GROWTH (CAGR 2019-2025) Selected commodities 12% 10% 8% 6% 4% 2% n/a n/a 0% -2% -4% Nickel Lithium Zinc Copper Iron ore Alumina Bauxite Potash Phosphate Global Australia Notes/Sources: Lithium, Nickel
Slide 63: Additional information: Network
Additional information: Network
Slide 64: Central Queensland Coal Network (CQCN)
1HFY2021 RESULTS ADDITIONAL INFORMATION Central Queensland Coal Network (CQCN) CQCN includes the Moura, Blackwater, Goonyella, Newlands and Goonyella to Abbot Point (GAPE) coal systems 64
Slide 65: Network financial and operating metrics
1HFY2021 RESULTS ADDITIONAL INFORMATION Network financial and operating metrics 1HFY2021 1HFY2020 Variance 2HFY2020 Tonnes (m) 103.7 116.6 (11%) 110.3 NTK (b) 26.0 29.0 (10%) 27.2 Operating Ratio 59.3% 61.0% 1.7ppt 60.1% Maintenance/NTK ($/’000 NTK) 2.3 2.2 (5%) 2.4 Opex/NTK ($/’000 NTK) 13.5 12.5 (
Slide 66: Network volumes: All rail operators (million tonnes)
1HFY2021 RESULTS ADDITIONAL INFORMATION Network volumes: All rail operators (million tonnes) 1HFY2021 1HFY2020 Variance 2HFY2020 Newlands 4.9 7.2 (32%) 6.9 Goonyella 51.3 61.3 (16%) 56.5 Blackwater 30.5 32.3 (6%) 30.3 Moura 6.8 6.2 10% 7.4 GAPE 10.3 9.6 7% 9.2 Total 103.7 116.6 (11%) 110.3 Note: Due
Slide 67: Network – 1HFY2021 Access Revenue movement
1HFY2021 RESULTS ADDITIONAL INFORMATION Network – 1HFY2021 Access Revenue movement $m $m Decrease in Maximum Allowable Revenue (MAR) from 1HFY2020 to 1HFY2021 (1.9) Volume under-recovery for 1HFY2021 (65.7) Volume under-recovery for 1HFY2020 (reversal of 1HFY2020 impact) 11.0 GAPE revenue 1.6 Revenu
Slide 68: Network adjusted MAR bridge – Approved UT5 Undertaking
1HFY2021 RESULTS ADDITIONAL INFORMATION Network adjusted MAR bridge – Approved UT5 Undertaking INDICATIVE NETWORK ADJUSTED MAXIMUM ALLOWABLE REVENUE (MAR)^ FY2019 – FY2023 ($M) 7 4 ~960 21 7 11 24 24 ~946 4 13 ~940 23 13 ~914 ~77 869 12 23 60 45 FY19 FY19 FY20 FY17 FY2018 MAR FY18 & FY20 FY20 FY18 &
Slide 69: Network revenue adjustment amounts (revenue cap)
1HFY2021 RESULTS ADDITIONAL INFORMATION Network revenue adjustment amounts (revenue cap) AT2-4 AT5 Total Financial Year (diesel tariff) (electric tariff) › Revenue adjustment amounts (RAA) are the $m $m $m difference by system between Aurizon’s Total 1,2 Actual AT2-5 Revenue and Allowable AT2-5 2020
Slide 70: Reconciliation of billed MAR to reported access revenue
1HFY2021 RESULTS ADDITIONAL INFORMATION Reconciliation of billed MAR to reported access revenue FY2021 FY2020 FY2019 $m Estimate1 Actual Actual Billed Access Revenue (AT1 to AT5) (ex. GAPE) 946 927 885 Approved Adjustments to MAR Revenue Cap (ex. GAPE and inclusive of capitalised interest)2 - (13) 4
Slide 71: UT5 Undertaking
1HFY2021 RESULTS ADDITIONAL INFORMATION UT5 Undertaking Aurizon Network’s access undertaking establishes the framework for access to the coal rail infrastructure in central Queensland UT5 TIMELINE 3 May 2019 September 2021 Quarter 1 July 2023 30 June 2027 1 July 2017 Report Date1 Initial Date Reset
Slide 72: UT5 Undertaking
1HFY2021 RESULTS ADDITIONAL INFORMATION UT5 Undertaking Revenue Protection Mechanisms The Maximum Allowable Revenue (MAR) is the total INDICATIVE SYSTEM REVENUE PROTECTION MECHANISM revenue Aurizon Network is permitted to earn each year, determined in accordance with the Regulatory Asset Base (RAB)
Slide 73: UT5 Undertaking
1HFY2021 RESULTS ADDITIONAL INFORMATION UT5 Undertaking Regulated Asset Base (RAB) ELEMENT DETAIL Rollforward RAB › This represents the value of Network assets for regulatory purposes › Each year Network rolls forward the RAB adjusting for indexation, depreciation, disposals, transfers and the addit
Slide 74: UT5 Undertaking
1HFY2021 RESULTS ADDITIONAL INFORMATION UT5 Undertaking Building Blocks BUILDING BLOCK DETAIL Return on capital (WACC) › 5.70% from 1 July 2017 to 2 May 2019 › 5.90% from 3 May 2019 to Report Date (expected September 2021 quarter) › 6.30% from Report Date to 30 June 2023 › WACC reset at 1 July 2023
Slide 75: UT5 Undertaking
1HFY2021 RESULTS ADDITIONAL INFORMATION UT5 Undertaking Rebate Mechanism ELEMENT DETAIL Mechanism › A customer will be entitled to a rebate from Network where it has received less than its annual contracted capacity, as assessed by the Independent Expert, as a result of Network’s performance below t
Slide 76: UT5 Undertaking
1HFY2021 RESULTS ADDITIONAL INFORMATION UT5 Undertaking QCA Role › Will pre-approve Maintenance strategies and budgets in the event agreement is not reached between Network and customers 1 › Will approve capital expenditure on a post-expenditure review basis for efficiency and prudency where Network
Slide 77: Independent Expert
1HFY2021 RESULTS ADDITIONAL INFORMATION Independent Expert The Independent Expert, Coal Network Capacity Co Pty Ltd, is progressing development of the Initial Capacity Assessment Report (ICAR) and remaining obligations Activity Progress Notes › Incorporation of Coal Network Capacity Co Pty Ltd Com
Slide 78: Additional information: Capital Expenditure
Additional information: Capital Expenditure
Slide 79: 1HFY2021 group and business unit capital expenditure ($m)
1HFY2021 RESULTS ADDITIONAL INFORMATION 1HFY2021 group and business unit capital expenditure ($m) Capital result in line with guidance for FY2021 240 15 140 2 225 65 138 7 28 58 6 22 2 5 2 5 1HFY20211,2 Network1,2 Coal1 Bulk2 Intermodal Corporate Growth Non Growth 1. Includes capitalised interest 2.
Slide 80: Glossary
1HFY2021 RESULTS ADDITIONAL INFORMATION Glossary Metric Description Access Revenue Amounts received by Aurizon Network for access to the Network infrastructure under all Access Agreements AFD Access Facilitation Deed Average haul length NTK/Total tonnes Contract utilisation Total volumes hauled as a
Slide 81: <2" AURIZON.
s <2" AURIZON.