News

Commentary for the quarter

Coal:

• March 2015 quarter volumes of 49.6mt represent a 2% increase compared to the previous corresponding period (pcp)
• FY2015 volume guidance remains 210-220mt

Queensland:

• Volumes of 38.9mt is in line with the pcp, despite the impact from Tropical Cyclone Marcia and the Protected Industrial Action as previously disclosed on 2 March 2015, which we estimate was 2mt in total. Growth would have been 5% excluding this impact
• Net Tonne Kilometres (NTK) declined 3% compared with pcp due to the weather impacts in the Blackwater corridor (longer haul distances) A new Rail Haulage Agreement was executed with Caledon Coal (Cook mine) on 24th April 2015 for 4.0mt for 11 years, commencinginMay 2015 in line with WICET commissioning NSW: Volumes of 10.7mt represent a 12% increase compared to the pcp, reflecting the commencement of the long-term Whitehaven contract on 1st March 2015 Net Tonne Kilometres (NTK) increased 29% compared with pcp reflecting the Whitehaven volumes from the Gunnedah Basin (longerthan average haul length)
• Severe weather experienced in the Hunter Valley during 20th April to 22nd April resulted in multiple ARTC network closures affecting Hunter Valley Coal. All services were suspended as of 20th April and are not expected to resume until 29th April at the earliest

Iron ore:

• FY2015 volume guidance is increased to ~25mt (from 23mt), representing continued above contract railings from existing customersand the additional tonnage from Top Iron
• March 2015 quarter volumes of 6.2mt represent a 17% decrease compared to pcp, in line with the end of two contracts. This was partly offset by:
• Strong railings from existing customers (contract utilisation continuing at a rate of >100%)
• The commencement of a new 12-month (+12-month option) contract for Top Iron for 1-1.5mt on 15th February 2015
• NTKs declined 20% compared with pcp which is consistent with the reduction in volumes

Freight:

• March 2015 quarter volumes of 9.8mt represent a 9% decrease compared to the pcp
• Bulk volumes decreased 5% (0.4mt) compared to the pcp due to the expiry of two Queensland contracts, planned maintenance closurefor a Nickel customer and weaker than forecast volumes for other customers in both Queensland and WA. These were partly offset bystrong volumes from a fertiliser customer in Queensland and an alumina customer in WA
• Intermodal volumes decreased 35% (0.6mt) compared to the pcp due to the impact of the CRT disposal (effective 1st December 2014)as well as a weaker than expected build-up to the Easter holiday period
• NTKs declined 3% due to the impact from the CRT volumes as noted above
• The recent severe weather in NSW has caused damage to track infrastructure north of Newcastle resulting in network owner ARTCclosing certain north-south rail lines in various locations. All intermodal services between Sydney and Brisbane have been stopped indefinitely. Accordingly, Aurizon has stood down employees from 26th April until 18th May at the earliest
• FY2015 Freight volume growth is now expected to be marginal due to the performance in the March quarter, the estimated impact from the NSW storms and lowered expectations for the June quarter