Aurizon expecting floods to hit earnings

FREIGHT operator Aurizon is expecting damage from the Queensland floods to hit its full-year earnings guidance.

The group, formerly known as QR National, gave the warning on Wednesday as it reported a 10.3 per cent drop in first half profit.

Ex-tropical cyclone Oswald and subsequent flooding caused significant damage to Aurizon's Blackwater and Moura rail systems in January.

Aurizon chief executive Lance Hockridge said flood damage was likely to affect full-year earnings, as coal guidance was revised down to between 192 million and 195 million tonnes.

"We see ... roughly a four million tonne impact as a result of the floods and thus the revision in the way that we describe our guidance for the full year," he told AAP on Wednesday.

"It has been an issue but nothing like the magnitude of two years ago."

Aurizon said the Moura system was re-opened on Tuesday night after a 26-day outage, while the Blackwater system had re-opened earlier in February.

The company estimates the below-rail repair costs from floods damage will be between $10 million and $15 million.

But Aurizon expects to recover those losses in 2014 through haulage tariffs it charges to mining companies.

The four million tonnes in lost coal volumes are expected to cause a $22 million hit to its earnings in 2012/13.

"We are working very closely with our customers to pick up some of those lost tonnes," Mr Hockridge said.

"Unlike the position two years ago, most of our customers have continued to produce and there are healthy stockpiles in the Queensland coal system."

A train derailment on February 7, between Rockhampton and Gladstone in central Queensland, is expected to cost $5 million.

Mr Hockridge noted that average weekly coal railings in the 13 weeks before the floods was 3.94mt.

Aurizon's statutory net profit fell to $175.7 million in the six months to December 31, from $196 million in the previous corresponding period.

Mr Hockridge said this was due to an $88 million bill to fund a second round of 814 voluntary redundancies, announced in August.

Revenue for the company rose to $1.9 billion from $1.7 billion.

Underlying net profit rose to $222 million from $175 million.

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