Pacific National Holdings Pty Ltd

Overview Key strengths Key risks Solid position in Australian intermodal, bulk, metallurgical, and thermal coal rail haulage. Exposure to volume risk, which is partially offset by take-or-pay contracts in the coal segment. Moderate to high entry barriers and significant proportion of take-or-pay contracts for coal, providing a degree of cash flow certainty. Increased competition in intermodal and bulk segments to pressure margins and volume growth. Disciplined capital management, including suspension of dividends until second-quarter fiscal 2024, to support metrics. Significant step up in capital expenditure program from fiscal 2024 necessary to realize growth opportunities. We anticipate PN will maintain its strong position in its intermodal, bulk, and coal haulage segments, supporting its business risk profile. This includes its market share

...Pacific National Holdings Pty Ltd.'s (PN) strong competitive position in its core markets and stable business are likely to persist in the next 12-24 months despite adverse weather impacts and increased competition. We anticipate PN will maintain its strong position in its intermodal, bulk, and coal haulage segments, supporting its business risk profile. This includes its market share of nearly 39% in New South Wales' (NSW) coal haulage volumes and about 21% 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, measured in net tonne kilometers (NTKs), deteriorated in fiscal 2022 by about 15% due to floods in the second half of fiscal 2022 and the impact of COVID-19 on the company's workforce. We expect intermodal volumes to remain strained over fiscal 2023 due to weak first-half operating conditions. Thereafter, intermodal volumes are expected to grow, reflecting a recovery...

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