Lower Coal Exports Didn’t Dent Aurizon's 2021 Earnings

Narrow-moat-rated Aurizon did well to keep earnings flat in fiscal 2021 despite lower coal export volumes. Underlying EBITDA was AUD 1,482 million and underlying NPAT was 533 million, both a couple of percent above our expectations. We expect haulage volumes to pick up in fiscal 2022 but much of the benefit will be offset by falling tariffs and nonrecurrence of some network revenue. Guidance is for fiscal 2022 EBITDA of AUD 1,425 to 1,500 million. We downgrade our 2022 forecast 1% to AUD 1,470 million. Our long-term forecasts are largely unchanged. Aurizon's share price is improving but it still looks decent value, trading 14% below our unchanged AUD 4.70 fair value estimate.