Pacific National Holdings Pty Ltd.

Overview Key strengths Key risks Robust position in Australian thermal and metallurgical coal, bulk, and intermodal rail-haulage. Exposure to volume variation as internal state border closures ease and road freight normalizes. Strong delivery against transformation initiatives in fiscal 2021 leading to improved cash generation and earnings stability. Ability of management to continue to execute and fully retain transformation initiative benefits. Moderate to high entry barriers and significant proportion of take-or-pay contracts for coal, providing a degree of cash flow certainty. Significant debt-funded capital expenditure program over next two to three years as pandemic-induced restraint eases. We anticipate PN will maintain its strong position in its coal, intermodal and bulk haulage segments, supporting its business risk profile. This includes its market

...Pacific National's (PN) strong competitive position in its core markets and stable business to persist. We anticipate PN will maintain its strong position in its coal, intermodal and bulk haulage segments, supporting its business risk profile. This includes its market share of nearly 46% in New South Wales' coal haulage and about 23% share in Queensland's coal-haulage volumes. The majority of PN's coal contracts are on a take-or-pay basis, providing additional visibility over revenues. Intermodal volumes improved in 2021--an increase of about 4%--as more freight moved to rail from road. While this could continue in the future, there is a risk as to how much...

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