Aurizon Holdings Ltd. · ASX:AZJ
Aurizon — H1 2020 Earnings Presentation
84 slides from Aurizon's earnings presentation, Feb 10, 2020
Slide 1: 1HFY2020 Results
1HFY2020 Results Andrew Harding – Managing Director & CEO Pam Bains – CFO & Group Executive Strategy 10 February 2020
Slide 2: Disclaimer
1HFY2020 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 Nothing in this presentation should be construed as a recommendation of or an offer to sell or a as “Aurizon” which includes its relat
Slide 3: Safety performance
1HFY2020 RESULTS Safety performance Tragic road accident in Queensland in December 2019 resulted in a fatality. Aurizon continues its focus on safety TOTAL RECORDABLE INJURY FREQUENCY RATE RAIL PROCESS SAFETY (TRIFR)1 -14% 11.07 5.49 Incidents per million train kilometres travelled +7% Incidents per
Slide 4: Performance overview
1HFY2020 RESULTS Performance overview Andrew Harding Managing Director & CEO
Slide 5: 1HFY2020 highlights
1HFY2020 RESULTS PERFORMANCE OVERVIEW 1HFY2020 highlights1 Solid results confirm EBIT guidance for FY2020. On market buy back increased by $100m to $400m GROUP EBIT STATUTORY NPAT2 ROIC FREE CASHFLOW2 $456m $343m 10.5% $465m up 12% up 51% up 0.5ppt up 26% NETWORK CAPITAL COAL VOLUMES DIVIDEND VOLUME
Slide 6: Coal update
1HFY2020 RESULTS PERFORMANCE OVERVIEW Coal update Coal has secured key contract extensions delivering on its strategy of de-risking and extending the contract book CUSTOMER UPDATE COAL CONTRACT VOLUME EXPIRY BY YEAR 1H19 v 1H201 60 › Peabody – extension of all existing volumes and the addition of ne
Slide 7: Bulk update
1HFY2020 RESULTS PERFORMANCE OVERVIEW Bulk update Ahead of expectations with strong performance driven by new contracts and operational efficiencies CUSTOMER UPDATE BULK BUSINESS CHARACTERISTICS › Mineral Resources – three year contract for rollingstock leasing, crewing and yard operations Multiple
Slide 8: Network update
1HFY2020 RESULTS PERFORMANCE OVERVIEW Network update QCA approved UT5 Undertaking delivers significant regulatory reform and a range of benefits for entire coal supply chain INDICATIVE UT5 TIMELINE 03/05/19 30/06/17 30/06/18 30/06/19 30/06/20 30/06/21 30/06/23 30/06/27 WACC 5.9% WACC 5.7% WACC 6.3%
Slide 9: Other matters
1HFY2020 RESULTS PERFORMANCE OVERVIEW Other matters Progress of other major items COMPLETE SALE OF RAIL › Sale completed 31 October 2019 – net proceeds received $165m GRINDING BUSINESS › $105m gain on sale accounted for in 1HFY2020 IN PROGRESS › 15 May 2019 – Federal Court of Australia rejected ACCC
Slide 10: Financial Performance
1HFY2020 RESULTS 1HFY2020 Financial Performance Pam Bains CFO & Group Executive Strategy
Slide 11: Key financial highlights
1HFY2020 RESULTS FINANCIAL PERFORMANCE Key financial highlights1 EBIT improvement reflects the approval of the UT5 Undertaking and the improved performance in Bulk $m 1HFY2020 1HFY2019 Variance › Revenue reflects the approved UT5 Undertaking in Network and new Revenue 1,529 1,455 5% contracts in Bul
Slide 12: Coal
1HFY2020 RESULTS FINANCIAL PERFORMANCE Coal EBIT result impacted by lower than expected volumes $m 1HFY2020 1HFY2019 Variance Revenue Above rail 629 617 2% › Volumes flat – down 3% in CQCN impacted by Track access 259 271 (4%) customer production issues, NSW & SEQ up 6% Other 1 - nm with new contrac
Slide 13: Bulk
1HFY2020 RESULTS FINANCIAL PERFORMANCE Bulk Turnaround ahead of plan Revenue $m 1HFY2020 1HFY2019 Variance › Revenue higher through new contract growth and Revenue 297 260 14% improved revenue quality Costs Access costs (65) (63) (3%) › Higher operating costs from new contracts offset in Operating c
Slide 14: Network
1HFY2020 RESULTS FINANCIAL PERFORMANCE Network EBIT performance reflects the uplift in revenue from the approved UT5 Undertaking Revenue $m 1HFY2020 1HFY2019 Variance › Increase in track access revenue principally as a Track Access 565 534 6% result of the UT5 Undertaking Services & Other 31 23 35%
Slide 15: Capital expenditure
1HFY2020 RESULTS FINANCIAL PERFORMANCE Capital expenditure Capital expenditure forecast for FY2020 reduced to $500m - $530m due to timing of growth projects CAPITAL EXPENDITURE1 FY2016 – FY2020(f) ($M) 703 › Growth capital in 1HFY2020 includes new rollingstock in CQCN and infrastructure upgrades 532
Slide 16: Legal and capital structure review
1HFY2020 RESULTS FINANCIAL PERFORMANCE Legal and capital structure review Standalone funding structures established for Operations and Network with independent gearing levels, consistent with their different business risk profiles NEW LEGAL STRUCTURE IMPLEMENTED › Legal structure is simplified and c
Slide 17: Funding update
1HFY2020 RESULTS FINANCIAL PERFORMANCE Funding update Near term focus is the refinance of the $525m AMTN Network bond maturing in October 2020 FY2020 FUNDING ACTIVITY KEY DEBT METRICS 1HFY2020 1HFY2019 › Network issued 10.5 year, $82m $A private placement Weighted average 4.0 years 4.8 years during
Slide 18: Outlook & Key Takeaways
1HFY2020 RESULTS Outlook & Key Takeaways Andrew Harding Managing Director & CEO
Slide 19: FY2020 outlook
1HFY2020 RESULTS OUTLOOK & KEY TAKEAWAYS FY2020 outlook Group EBIT guidance remains $880m – $930m KEY ASSUMPTIONS › Network - Uplift in WACC from 5.9% to 6.3% assumed mid CY2020 › Above Rail Coal volumes 210 - 220mt › Operational efficiency improvements remain a key driver in the business › Redundan
Slide 20: Strategy delivers results
1HFY2020 RESULTS OUTLOOK & KEY TAKEAWAYS Strategy delivers results Aurizon’s strategy enables the delivery of shareholder value Achieved Execute De-risked Ongoing Optimal legal Restructured fundamental Freight near term operational and capital to Business regulatory Review Above Rail efficiency stru
Slide 21: Contact and further information
Contact and further information Chris Vagg Kath Clapham Head of Investor Relations & Group Treasurer Manager Investor Relations +61 7 3019 9030 +61 7 3019 9044 chris.vagg@aurizon.com.au kath.clapham@aurizon.com.au ASX: AZJ US OTC: AZNNY
Slide 22: Additional information
1HFY2020 RESULTS Additional information ESG Group Coal Bulk Network Capital Expenditure
Slide 23: Additional information: ESG
1HFY2020 RESULTS Additional information ESG
Slide 24: Sustainability
1HFY2020 RESULTS ADDITIONAL INFORMATION Sustainability FY2019 was the third year of TCFD disclosure for Aurizon › Aurizon takes a direct approach to reporting environmental, OUR FY2019 social and governance (ESG) disclosures with the SUSTAINABILITY publication of the annual Sustainability Report HIG
Slide 25: Environment
1HFY2020 RESULTS ADDITIONAL INFORMATION Environment Aurizon continues to focus on cutting diesel and greenhouse gas emissions as part of our efforts to maintain Australia’s excellent air quality standards and manage our carbon footprint AURIZON’S GREENHOUSE GAS PROFILE AURIZON’S LOCOMOTIVE EMISSIONS
Slide 26: Additional information: ESG – Future of Coal
1HFY2020 RESULTS Additional information ESG – Future of Coal
Slide 27: Australian Export Coal Demand
1HFY2020 RESULTS ADDITIONAL INFORMATION Australian Export Coal Demand The fundamentals of Australian metallurgical and thermal coal remain strong, driven by steel and energy demand in Asia, supporting coal export growth of 1-2%pa over the next decade METALLURGICAL COAL THERMAL COAL › Metallurgical c
Slide 28: Australia FY2019 Coal Supply Summary
1HFY2020 RESULTS ADDITIONAL INFORMATION Australia FY2019 Coal Supply Summary Coal Production Domestic Consumption Export All Coal Export (By Destination) All Coal Export (By Port) 114mt 162mt 454mt 60mt 393mt 88mt 118mt 51mt 56mt 72mt 29% 49mt 41% 22% 35mt 30% State Split State Split State Split 14%
Slide 29: Global Coking (Metallurgical) Coal Landscape
1HFY2020 RESULTS ADDITIONAL INFORMATION Global Coking (Metallurgical) Coal Landscape Around one-quarter of global metallurgical coal demand is met through seaborne trade with Australia commanding over 60% of this market 2017, million tonnes 1,040mt 713mt Import Market: Split 99mt 224mt 63mt China 24
Slide 30: Future of Coal – Metallurgical Coal
1HFY2020 RESULTS ADDITIONAL INFORMATION Future of Coal – Metallurgical Coal Driven by urbanisation and infrastructure development, the opportunity remains for India and South East Asian nations to increase steel usage INDIA: CRUDE STEEL PRODUCTION AND COKING APPARENT (CRUDE STEEL EQUIVALENT) STEEL U
Slide 31: Metallurgical Coal Market | Australia
1HFY2020 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. A further 25 billion tonnes1 of resources can be drawn upon AUSTRALIA: METALLURGICAL COAL EX
Slide 32: Global Steam (Thermal) Coal Landscape
1HFY2020 RESULTS ADDITIONAL INFORMATION Global Steam (Thermal) Coal Landscape Over 80% of global thermal coal demand is produced and consumed within country. Australia holds a 20% share of the seaborne market that is dominated by Asian demand 2017, million tonnes 5,678mt 4,648mt Import Market: Split
Slide 33: Future of Coal – Thermal Coal
1HFY2020 RESULTS ADDITIONAL INFORMATION Future of Coal – Thermal Coal 98% of Australian exports are destined for Asia. It is this region (rather than global consumption) that is projected to use coal-fired generation assets for a prolonged period PER CAPITA ELECTRICITY CONSUMPTION VS. PER CAPITA INT
Slide 34: Thermal Coal Market | Australia
1HFY2020 RESULTS ADDITIONAL INFORMATION Thermal Coal Market | Australia Australia’s thermal coal competitiveness is driven by coal quality characteristics and geographic proximity to Asia AUSTRALIA: THERMAL COAL EXPORT1 THERMAL COAL CASH COSTS (US$/t, CFR JAPAN, 2019)2 250 $150 $70 Thermal Coal Pric
Slide 35: Additional information: ESG - Bulk
1HFY2020 RESULTS Additional information ESG - Bulk
Slide 36: Bulk – Australia Capital & Exploration Expenditure
1HFY2020 RESULTS ADDITIONAL INFORMATION Bulk – Australia Capital & Exploration Expenditure CAPITAL EXPENDITURE: METAL ORE MINING1 EXPLORATION EXPENDITURE: IRON ORE +31% A$4.0b A$150m +17% A$100m A$2.0b A$50m A$0.0b A$0m Jun- Dec- Jun- Dec- Jun- Dec- Jun- Dec- Jun- Jun- Dec- Jun- Dec- Jun- Dec- Jun-
Slide 37: Bulk commodities: Global & Australia
1HFY2020 RESULTS ADDITIONAL INFORMATION Bulk commodities: Global & Australia Global & Australia supply growth (CAGR 2019-2024) (Selected commodities) 11.2% 4.0% 3.7% 3.5% 2.0% 0.9% Lithium Nickel Copper Potash Phosphate Bauxite Iron ore Alumina Zinc Global Australia Notes/Sources: Lithium, Nickel, B
Slide 38: Additional information: Group
1HFY2020 RESULTS Additional information Group
Slide 39: Aurizon's rail haulage operations
1HFY2020 RESULTS ADDITIONAL INFORMATION Aurizon’s rail haulage operations KEY OPERATIONAL STATISTICS COMMODITIES Coal, iron ore 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: Vision, purpose, values and strategic levers
1HFY2020 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 Aurizo
Slide 41: Enterprise Agreements
1HFY2020 RESULTS ADDITIONAL INFORMATION Enterprise Agreements Headline Increases # Staff Term EA Covered Expiry Date Year 1 Year 2 Year 3 Year 4 Comments (years) (approx.) WA Rollingstock 100 4 10 May 2021 1.0% 1.5% 1.75% 1.75% Complete Maintenance WA Rail Operations 420 4 30 June 2022 1.5% 2.0% 2.0
Slide 42: Prioritisation of capital
1HFY2020 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 43: Financial highlights (underlying)
1HFY2020 RESULTS ADDITIONAL INFORMATION Financial highlights1 (underlying) $m 1HFY2020 1HFY2019 Variance 2HFY2019 Revenue 1,528.8 1,455.4 5% 1,452.2 Operating costs (797.6) (783.7) (2%) (752.3) EBITDA 731.2 671.7 9% 699.9 EBIT 455.6 406.0 12% 423.0 NPAT 268.9 226.9 19% 246.4 EPS (cps) 13.6 11.4 19%
Slide 44: Underlying group EBIT bridge ($m)
1HFY2020 RESULTS ADDITIONAL INFORMATION Underlying group EBIT bridge ($m) 5 456 29 30 406 4 1HFY2019 Coal Bulk Network Other 1HFY2020 44
Slide 45: EBIT by business unit (underlying)
1HFY2020 RESULTS ADDITIONAL INFORMATION EBIT by business unit (underlying) $m 1HFY2020 1HFY2019 Variance 2HFY2019 Coal 205.8 210.3 (2%) 204.8 Bulk 43.7 14.2 208% 23.1 Network 232.2 202.9 14% 197.4 Other (26.1) (21.4) (22%) (2.3) EBIT1 455.6 406.0 12% 423.0 1. Continuing Operations 45
Slide 46: Group operating highlights
1HFY2020 RESULTS ADDITIONAL INFORMATION Group operating highlights1 $m 1HFY2020 1HFY2019 Variance 2HFY2019 Labour Costs2 / Revenue 26.1% 25.5% (0.6ppt) 26.5% EBITDA Margin – Underlying 47.8% 46.2% 1.6ppt 48.2% Operating Ratio – Underlying 70.2% 72.1% 1.9ppt 70.9% Tonnes (m) 129.9 130.1 - 128.8 Peopl
Slide 47: Other profit & loss (underlying)
1HFY2020 RESULTS ADDITIONAL INFORMATION Other profit & loss (underlying) $m 1HFY2020 1HFY2019 Variance 2HFY2019 Revenue 28.0 40.9 (32%) 41.3 Total operating expenses (51.1) (57.6) 11% (38.5) EBITDA (23.1) (16.7) (38%) 2.8 Depreciation and amortisation (3.0) (4.7) 36% (5.1) EBIT (26.1) (21.4) (22%) (
Slide 48: Quarterly tonnes – December quarter 2019
1HFY2020 RESULTS ADDITIONAL INFORMATION Quarterly tonnes – December quarter 2019 Quarter Dec-19 Year Financial Variance Quarter Ending vs. to date Dec-18 Dec-18 Mar-19 Jun-19 Sept-19 Dec-19 % Dec-19 Dec-18 % Coal volumes (mt) CQCN 38.4 36.4 39.5 36.6 37.7 (2%) 74.3 76.4 (3%) NSW & SEQ 15.9 15.3 16.6
Slide 49: Cashflow and shareholder returns
1HFY2020 RESULTS ADDITIONAL INFORMATION Cashflow and shareholder returns FREE CASH FLOW ($M) SHAREHOLDER RETURNS ($M) +10% 830 735 762 704 669 301 300 552 465 465 488 462 69 340 215 227 529 462 396 247 FY15 FY16 FY17 FY18 FY19 1HFY20 FY15 FY16 FY17 FY18 FY19 1HFY20 Total Group Continuing operations
Slide 50: Balance sheet summary
1HFY2020 RESULTS ADDITIONAL INFORMATION Balance sheet summary $m 31 December 2019 30 June 2019 Assets classified as held for sale1 74.7 108.4 Other current assets 607.8 631.2 Property, plant & equipment 8,499.3 8,536.3 Other non-current assets 437.6 425.2 Total assets 9,619.4 9,701.1 Liabilities cla
Slide 51: Reconciliation of borrowings
1HFY2020 RESULTS ADDITIONAL INFORMATION Reconciliation of borrowings $m Commentary Total debt including working capital facility 3,184.8 › Non-current debt on a Cash basis Reconciliation to Financial Statements Add/(less): › Transaction costs directly attributable to borrowings are Capitalised trans
Slide 52: Significant Items
1HFY2020 RESULTS ADDITIONAL INFORMATION Significant Items $m 1HFY2020 1HFY2019 Variance 2HFY2019 Continuing operations – Gain on sale of Rail Grinding 105.4 - - - Discontinued operation - Intermodal 2.5 (10.3) nm (1.1) 52
Slide 53: Redundancy cost information
1HFY2020 RESULTS ADDITIONAL INFORMATION Redundancy cost information › Redundancy costs since IPO have been included in Redundancy costs Redundancy costs underlying EBIT as well as classified as a significant Year included in underlying classified as item EBIT ($m) Significant items ($m) › Aurizon cl
Slide 54: Dividend history
1HFY2020 RESULTS ADDITIONAL INFORMATION Dividend history Amount per share Payment Date Franking Payout Ratio (cents) FY2020 Final FY2020 Interim 23 March 2020 13.7 70% 100%1 FY2020 Total Dividend FY2019 Final 23 September 2019 12.4 70% 100%1 FY2019 Interim 25 March 2019 11.4 70% 100%1 FY2019 Total D
Slide 55: Adoption of new accounting standards
1HFY2020 RESULTS ADDITIONAL INFORMATION Adoption of new accounting standards The Group adopted AASB 16 from 1 July 2019 IMPACT ON BALANCE SHEET › The adoption of AASB 16 results in almost all previously ASSETS $m recognised operating leases being recognised on the balance Current Assets sheet. Under
Slide 56: Additional information: Coal
1HFY2020 RESULTS Additional information Coal
Slide 57: Coal snapshot
1HFY2020 RESULTS ADDITIONAL INFORMATION Coal snapshot As at 31 December 2019 106 336 233km average haul million tonnes active locos length 74 8,570 23.8km/hr average services active wagons velocity per day TONNES HAULAGE BREAKDOWN (estimate as at 30 June 2019) Thermal Coal CQCN 30% Metallurgical Coa
Slide 58: Coal operations - CQCN
1HFY2020 RESULTS ADDITIONAL INFORMATION Coal operations - CQCN Includes all mines in the CQCN 58
Slide 59: Coal operations – NSW & South East Queensland
1HFY2020 RESULTS ADDITIONAL INFORMATION Coal operations – NSW & South East Queensland (SEQ) Includes all mines in NSW & SEQ 59
Slide 60: Coal profit and loss (underlying)
1HFY2020 RESULTS ADDITIONAL INFORMATION Coal profit and loss (underlying) $m 1HFY2020 1HFY2019 Variance 2HFY2019 Tonnes (m) 106.3 106.5 - 107.8 Above Rail 628.5 616.7 2% 619.5 Track Access 258.9 270.5 (4%) 217.2 Other 1.2 0.3 300% 0.6 Total Revenue 888.6 887.5 - 837.3 Operating Expenses (581.6) (582
Slide 61: Coal financial and operating metrics
1HFY2020 RESULTS ADDITIONAL INFORMATION Coal financial and operating metrics 1HFY2020 1HFY2019 Variance 2HFY2019 Tonnes (m) 106.3 106.5 - 107.8 NTKs (bn) 24.8 25.1 (1%) 25.4 Above Rail Revenue /NTK ($/’000 NTK) 25.3 24.6 3% 24.4 Opex (excl access)/NTK ($/’000 NTK) 17.2 16.3 (6%) 16.9 Locomotive Prod
Slide 62: Coal haulage tonnes (mt) by system
1HFY2020 RESULTS ADDITIONAL INFORMATION Coal haulage tonnes (mt) by system 1HFY2020 1HFY2019 Variance 2HFY2019 CQCN Newlands 10.5 9.9 6% 8.9 Goonyella 29.1 30.4 (4%) 30.6 Blackwater 28.4 29.1 (2%) 29.8 Moura 6.3 7.0 (10%) 6.6 Total CQCN 74.3 76.4 (3%) 75.9 NSW & SEQ West Moreton 3.2 3.8 (16%) 3.6 Hu
Slide 63: Coal contract portfolio
1HFY2020 RESULTS ADDITIONAL INFORMATION Coal contract portfolio COAL CONTRACT PORTFOLIO EXPIRY PROFILE1 FORECAST COAL CONTRACTED VOLUMES (MTPA)1 AS AT 31 DECEMBER 2019 250 0 - 3 years 238 229 9% 70 63 63 31% >3 - 7 years 60% >7 years 166 175 180 AS AT 30 JUNE 2019 0 - 3 years 13% FY2018a FY2019a FY2
Slide 64: Coal contract portfolio
1HFY2020 RESULTS ADDITIONAL INFORMATION Coal contract portfolio AURIZON COAL CONTRACT VOLUME EXPIRY BY YEAR (MTPA – AS AT 31 DECEMBER 2019) 60 Contracted volume expiry Peabody extension / new volume Coronado extension / new volume 45 Million tonnes per annum 30 15 0 FY20 FY21 FY22 FY23 FY24 FY25 FY2
Slide 65: Additional information: Bulk
1HFY2020 RESULTS Additional information Bulk
Slide 66: Bulk snapshot
1HFY2020 RESULTS ADDITIONAL INFORMATION Bulk snapshot As at 31 December 2019 24 167 HAULAGE BREAKDOWN1 million tonnes active locos 25% Bauxite/Alumina 48% Iron Ore Other2 27% >10 2,464 products hauled active wagons 1. Incorporates hauls that report tonnes, does not include Linfox and other hauls tha
Slide 67: Bulk operations – Queensland
1HFY2020 RESULTS ADDITIONAL INFORMATION Bulk operations – Queensland 67
Slide 68: Bulk operations – Western Australia
1HFY2020 RESULTS ADDITIONAL INFORMATION Bulk operations – Western Australia 68
Slide 69: Bulk profit & loss (underlying)
1HFY2020 RESULTS ADDITIONAL INFORMATION Bulk profit & loss (underlying) $m 1HFY2020 1HFY2019 Variance 2HFY2019 Tonnes (m) 23.6 23.6 - 21.0 Total Revenue 297.3 259.5 15% 242.2 Total operating expenses (244.7) (236.8) (3%) (210.4) EBITDA 52.6 22.7 132% 31.8 Depreciation and amortisation (8.9) (8.5) (5
Slide 70: Additional information: Network
1HFY2020 RESULTS Additional information Network
Slide 71: Network snapshot
1HFY2020 RESULTS ADDITIONAL INFORMATION Network snapshot As at 31 December 2019 117 40+ three above rail million tonnes mines serviced operators $5.6b five 2,670km Regulated Asset export terminals railway track Base1 HAULAGE BREAKDOWN2 1HFY2020 (estimate as at 30 June 2019) Thermal Coal 31% Metallur
Slide 72: Central Queensland Coal Network (CQCN)
1HFY2020 RESULTS ADDITIONAL INFORMATION Central Queensland Coal Network (CQCN) CQCN comprises four major coal systems and one connecting system link (GAPE) servicing Queensland’s Bowen Basin coal region 72
Slide 73: Network profit & loss (underlying)
1HFY2020 RESULTS ADDITIONAL INFORMATION Network profit & loss (underlying) 1HFY2020 1HFY2019 Variance 2HFY2019 $m Tonnes (m) 116.6 116.5 - 116.2 Access Revenue 564.7 534.1 6% 536.2 Services and other 31.2 23.3 34% 24.1 Total Revenue 595.9 557.4 7% 560.3 Operating costs (201.2) (196.8) (2%) (199.7) E
Slide 74: Network financial and operating metrics
1HFY2020 RESULTS ADDITIONAL INFORMATION Network financial and operating metrics 1HFY2020 1HFY2019 Variance 2HFY2019 Tonnes (m) 116.6 116.5 - 116.2 NTK (bn) 29.0 28.8 1% 29.1 Operating Ratio 61.0% 63.6% 2.6ppt 64.8% Maintenance/NTK ($/’000 NTK) 2.2 2.2 - 2.4 Opex/NTK ($/’000 NTK) 12.5 12.3 (2%) 12.5
Slide 75: Network volumes
1HFY2020 RESULTS ADDITIONAL INFORMATION Network volumes 1HFY2020 1HFY2019 Variance 2HFY2019 Newlands 7.2 6.5 11% 6.1 Goonyella 61.3 62.6 (2%) 61.9 Blackwater/WIRP 32.3 31.8 2% 33.1 Moura 6.2 7.0 (11%) 6.6 GAPE 9.6 8.6 12% 8.5 Total 116.6 116.5 - 116.2 Average haul length2 (kms) 248.3 247.5 - 250.1 1
Slide 76: Network – 1HFY2020 Access Revenue movement
1HFY2020 RESULTS ADDITIONAL INFORMATION Network – 1HFY2020 Access Revenue movement $m $m Increase in MAR from 1HFY2019 to 1HFY2020 31.5 Reversal of FY2018 UT5FD True-Up from 1HFY2019 30.4 Rebates (primarily recovery of UT5 True-Up, rebates previously paid on Transitional Tariffs) 11.1 Volume under-r
Slide 77: Network adjusted MAR bridge – Approved UT5 Undertaking
1HFY2020 RESULTS ADDITIONAL INFORMATION Network adjusted MAR bridge – Approved UT5 Undertaking Indicative Network adjusted MAR (Ex GAPE) for FY2019 to FY2023 based on the revised terms of the UT5 Undertaking INDICATIVE NETWORK ADJUSTED MAR* FY2018 – FY2023 ($M) ~954 ~6 ~948 ~7 ~942 ~12 13 ~937 12 93
Slide 78: Network revenue adjustment amounts (revenue cap)
1HFY2020 RESULTS ADDITIONAL INFORMATION Network revenue adjustment amounts (revenue cap) › Revenue adjustment amounts (RAA) are the difference by system between Aurizon’s Total Financial AT2-4 AT5 Total Actual AT2-5 Revenue and Allowable AT2-5 (diesel tariff) (electric tariff) Year $m $m $m Revenue
Slide 79: Reconciliation of billed MAR to reported access revenue
1HFY2020 RESULTS ADDITIONAL INFORMATION Reconciliation of billed MAR to reported access revenue FY2020 FY2019 FY2018 $m Estimate* Actual Actual Billed Access Revenue (AT1 to AT5) (ex. GAPE) 950 885 940 Approved Adjustments to MAR Flood Claim recoveries1 - - 18 Revenue Cap (ex. GAPE and inclusive of
Slide 80: Regulated asset base (RAB)
1HFY2020 RESULTS ADDITIONAL INFORMATION Regulated asset base (RAB) Network maintains a record of the value of its existing assets for regulatory pricing called the RAB ROLLFORWARD RAB › This represents the value of Network assets for regulatory purposes › Each year Network rolls forward the RAB adju
Slide 81: Additional information: Capital Expenditure
1HFY2020 RESULTS Additional information Capital Expenditure
Slide 82: Group and business unit capital expenditure ($m)
1HFY2020 RESULTS ADDITIONAL INFORMATION 1HFY2020 Group and business unit capital expenditure ($m) 230 139 219 133 62 57 14 14 1 11 6 5 14 14 0 1 1HFY20201,2 Network1,2 Coal1 Bulk2 Intermodal Corporate Non Growth Growth 1. Includes capitalised interest 2. Net of externally funded payments 82
Slide 83: Glossary
1HFY2020 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 84: <4 AURIZON.
7M <4 AURIZON.