Aurizon's profit to have low contribution from BHP retaining NSW thermal coal unit - Citi

Aurizon Holdings

17/06/2022 07:57

** Analysts at Citi expect BHP Group  BHP.AX  continuing to
operate New South Wales Energy Coal (NSWEC) thermal coal unit
will only have a low contribution to rail freight operator
Aurizon Holdings'  AZJ.AX  profit
    ** Global miner BHP said on Thursday it was unable to sell
its New South Wales Energy Coal (NSWEC) thermal coal unit and
would operate it for another eight years before shutting down
 urn:newsml:reuters.com:*:nL4N2Y300I  
    ** AZJ has the whole contract to transport the coal mined
from the unit 
    ** BHP sees its FY22 production at New South Wales Energy
Coal at 13-15 metric tonnes per annum, which is 7% higher than
Citi's estimates
    ** The size and volume of the contract, it would be
reasonable to assume that the price and therefore contribution
to profit would be lower - Citi 
    ** Citi, however, sees with viable alternative for assets
and time to execute, the transition should be relatively
manageable
    ** Two of 12 analysts rate the stock "buy" or higher, six
"hold" and four "sell" or lower; their median PT is A$3.9–
Refinitiv Eikon data 
    ** AJZ stock up 11.8% this year as of last close 
    


 (Reporting by Navya Mittal in Bengaluru)
 ((navya.mittal@thomsonreuters.com))