Aurizon is exiting the container freight business to increase its focus on its growing coal division, as the rail haul operator suffered a full-year loss of $188 million.
The bulk freight operator's underlying earnings before interest and tax for the year to June 30 fell four per cent to $836 million, due to an estimated $89 million loss from the impacts of Cyclone Debbie.
Aurizon chief executive Andrew Harding said despite the cyclone - which closed down the central Queensland coal network - coal continued to perform, with falls in Queensland volumes offset by higher numbers in NSW.
The company believes the demand, particularly for thermal coal from Asian markets, remains strong and forecast coal volumes to be between 215 and 225 million tonnes in 2017/2018.
The company's net loss was flagged in July, after it outlined a $526 million writedown in the value of its bulk business, taking its full-year impairment charges to $927 million.
On Monday, Aurizon reported a loss in statutory earnings of $91 million, blaming the fall on the $811.2 million in asset impairments and $115.87 million in redundancy costs for more than 920 employees across the business.
Aurizon announced that, following a review of its freight business, it would exit its intermodal container freight terminal business via a combination of closures and sales.
Mr Harding said the company had suffered significant losses from its freight division, with the intermodal business making a profit in only three of the past 10 years and losing $57 million in 2016/17 alone.
Total freight revenue fell eight per cent to $682.7 million, while freight haulage volumes fell five per cent.
"The business has not been able to establish significant scale and a customer base to support a profitable business in such a highly competitive market," Mr Harding said, adding the move will result in 250 jobs being cut.
Aurizon will sell its Queensland intermodal business to a consortium of Pacific National and LinFox, and its Acacia Ridge intermodal terminal to Pacific National, for a total of $220 million.
The remainder of its intermodal businesses outside Queensland will be closed by December to allow the company to focus on core, profitable parts, Mr Harding said, with some staff and equipment redeployed into NSW coal haulage.
Aurizon shares were five cents lower at $5.08 at 1532 AEST.
AURIZON SUFFERS ON IMPAIRMENT HIT:
* Statutory net profit loss of $188m, from a profit of $72.4m
* Revenue of $3.45bn, unchanged.
* Statutory earnings (EBIT) loss of $91m, from a profit of $343.4m
* Final dividend of 8.9 cents, partially franked, from 13.3 cents
