Aurizon has lowered its earnings forecast for FY17 by between $100 million and $115 million, because of extended shutdowns after Cyclone Debbie battered Queensland in late March.
Three of Aurizon’s four Queensland coal networks have now been re-opened.
The Blackwater System was re-opened on April 10, while Moura was re-opened April 12, and Newlands was re-opened April 13.
But the Goonyella System received significant damage, and will remain closed until April 26, at which stage trains will be able to run with speed restrictions and reduced capacity.
Aurizon’s shares were put on hold on the ASX on Tuesday so its board could meet to discuss the implications of the closures.
Overall, the company expects to lose between 12 million tonnes and 14 million tonnes of above rail volumes, reducing its forecast above rail volume for FY17 from 200-212 million tonnes, to 190-200 million tonnes.
Aurizon’s below rail volumes – i.e. coal carried on Aurizon’s network by other companies – will drop by 19 to 21 million tonnes.
The company expects these lost volumes to take a $70 million to $80 million bite out of its below rail revenue, but said the incident would trigger take-or-pay provisions of roughly $30 million, reducing the overall impact to between $40 million and $50 million.
On top of that, Aurizon’s has had to pay between $40 million and $50 million in flood repair costs.
All told, the cyclone will impact Aurizon’s earnings before interest and taxation (EBIT) by between $100 million and $115 million in FY17.
EBIT will now be in the range of $800-850 million, rather than the previously-advised $900-950 million, Aurizon said.
The company said it would be able to recover approximately $70 million to $80 million of the lost revenue through regulatory procedures over the next few financial years.
Aurizon began trading on the ASX again just before 2pm on Tuesday, but closed just 1.51% down, at $5.21.