Pacific National Holdings Pty Ltd.

Overview Key strengths Key risks Strong position in Australia's intermodal, bulk, metallurgical, and thermal coal rail haulage markets. Exposed to volume risk and contract renewals. Moderate to high entry barriers and significant portion 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 a suspension/moderation of distributions to support metrics. Significant capital expenditure (capex) to realize growth opportunities. . The company will maintain its position in the intermodal, bulk, and coal haulage segments. This will support its business risk profile. Most of PN's coal contracts are on a take-or-pay basis, providing visibility for nearly over 40% of its gross revenue. Intermodal

...Pacific National Holdings Pty Ltd. (PN) will likely maintain its established position in its core markets and stable business over the next 12-24 months, despite increased competition. The company will maintain its position in the intermodal, bulk, and coal haulage segments. This will support its business risk profile. Most of PN's coal contracts are on a take-or-pay basis, providing visibility for nearly over 40% of its gross revenue. Intermodal volumes deteriorated in fiscal 2023 (year-end June 30) due to floods and east-west rail network closures. Growth will be weaker over the next few years due to increased competition. This is given the reentry of Aurizon Operations Ltd. (###+/Stable/--), underpinned by its new contract with Team Global Express (TGE, not rated). PN expects to make up for the lost revenue and volumes as customers shift from road to rail, on improved pricing, and a better customer mix. Lower EBITDA margins will reflect the competitive pressure over the next two to three...

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