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The QBE Insurance Group Ltd (ASX: QBE) share price has been among the best performers on the S&P/ASX 200 Index (ASX: XJO) in 2021.

Since the start of the year, the insurance giant’s shares have risen 38%.

This is more than triple the return of the benchmark index during the period.

Could the QBE share price reach $14.00 by the end of the year?

Despite the impressive performance by the QBE share price this year, a number of leading brokers believe the company’s shares still have room to climb.

One of those is Citi. Its analysts currently have a buy rating and $14.10 price target on the company’s shares. Based on the current QBE share price of $11.78, this implies potential upside of just under 20% for investors.

And with the broker pencilling in a 50 cents per share dividend in FY 2022, the total potential return increases to approximately 24%.

In light of this, Citi appears to believe there’s potential for the QBE share price to be trading around the $14.00 mark come the end of the year.

Why is the broker bullish?

Citi was pleased with QBE’s performance during the first half of FY 2021 and is expecting more of the same in the future.

It commented: “QBE’s result showed ample evidence of the strong top line growth and improving margins we were anticipating and it seems like there is plenty more to come.”

“Rate rises continue to be strong, business growth opportunities are being taken and QBE seems to be sensibly using the strong margin environment to further an element of prudence. Evidence in this can be seen in the IBNR for risk losses, a probably conservative 1H21 COR for crop and the level of retained COVID provisioning despite minimal claims on some areas.”

This led to the broker lifting its earnings estimates materially. It now expects earnings per share of 81 cents in FY 2021, 101 cents in FY 2022, and 125 cents in FY 2023.

It concluded: “We lift our forecasts for both margin and growth with significant 15-24% upgrades to EPS. With the industry environment continuing to be very supportive we retain our Buy call.”

The post Could the QBE (ASX:QBE) share price hit $14 by the end of 2021? appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Lynas Rare Earths Ltd (ASX: LYC) share price is plunging as the company reported its operations were hit with a COVID-19-induced shutdown over the quarter just been.

The company released its quarterly activities report for the first quarter of financial year 2022 this morning. It detailed a tough quarter for Lynas, during which the company faced several pandemic-related challenges.

However, the company has high hopes for the rest of FY 2022. It expects demand for its materials to increase in the new year.

At the time of writing, the Lynas share price is $6.94, 6.72% lower than its previous close.

Let’s take a look at what the 3 months ended 30 September looked like for Lynas Rare Earths.

Lynas share price falls on COVID-19 struggles

Over the quarter just been, Lynas saw $121.6 million of revenue. That’s the second-highest quarterly result on record for the company and up from $184.9 million in the previous quarter. However, its sales receipts dropped by $100 million to $92 million.

According to Lynas, global demand for rare earth materials is very strong, particularly in the magnet market. The company’s customers told it they expect demand to continue heating up in 2022.

Over the September quarter, the average China domestic price for neodymium-praseodymium was US$80.1 per kilogram.

Unfortunately, the Lynas share price might be reacting to news the company’s production was hit with COVID-19-induced restrictions during the period, as Malaysia experienced a third wave of cases, peaking at around 20,000 a day.

Despite over 99% of those working at Lynas’ Malaysian cracking and leaching plant being fully vaccinated as of 13 October, the plant was shut down for 11 days of the quarter due to staff unavailability. The company used the shutdown to complete maintenance.

Additionally, Lynas shut down the finishing of non-neodymium-praseodymium products for 16 days. It instead used its available staff for neodymium-praseodymium production.

The September quarter saw 70% of its neodymium-praseodymium production capacity achieved. Production of neodymium-praseodymium came to 1,255 tonnes, 138 tonnes less than the previous period.

Lynas’ total production of rare earth oxide came to 3,166 tonnes for the first quarter of financial year 2022. Though, that was down from 3,778 tonnes in the previous quarter.

Lynas also battled shipping delays during the quarter just been. However, the company said its close relationship with its longstanding customers meant it could minimise the supply chain disruption.

Finally, the quarter saw Lynas continuing to work on its Lynas 2025 foundation projects. The company also commenced its Mining Campaign 4-1 at Mt Weld.

The post Lynas (ASX:LYC) share price falls 7% on news of COVID-induced shutdown appeared first on The Motley Fool Australia.

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Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

What happened

Shares of Tesla (NASDAQ: TSLA) jumped on Thursday. The growth stock was up 3.3% as of 12:50 p.m. EDT.

The stock’s gain comes after the company reported better-than-expected third-quarter results, featuring non-GAAP (adjusted) earnings per share that more than doubled year over year.

So what

On Wednesday afternoon, Tesla said its revenue rose 57% year over year to $13.8 billion, driven by a 73% jump in vehicle deliveries. Adjusted earnings per share increased 145% year over year to a record $1.86. These results compare to analysts’ consensus forecasts for revenue and adjusted earnings per share of $13.6 billion and $1.59, respectively.

The company’s surging sales and robust financial results are particularly impressive considering the current challenging operating environment.

“A variety of challenges, including semiconductor shortages, congestion at ports and rolling blackouts, have been impacting our ability to keep factories running at full speed,” Tesla said in its third-quarter shareholder letter. “We believe our supply chain, engineering and production teams have been dealing with these global challenges with ingenuity, agility and flexibility that is unparalleled in the automotive industry.”

Now what

Importantly, Tesla reiterated its guidance for deliveries to grow at an average annualized rate of more than 50% over “a multi-year horizon.” But management warned that its rate of growth will ultimately be dependent on “the successful introduction of many new product and manufacturing technologies in new locations, ongoing supply chain related challenges and regional permitting.”

While Tesla didn’t provide much insight into what to expect from vehicle deliveries in Q4, the automaker certainly seems on track to grow total deliveries this year at a rate that exceeds 50% growth over 2020. Management did say in the company’s third-quarter earnings call that Tesla exited Q3 at an annualized production run rate of more than 1 million vehicles per year. “The increase in production rate has primarily been driven by further ramping of the Model Y at our Shanghai factory,” said Tesla CFO Zach Kirkhorn.

Daniel Sparks has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Tesla. The Motley Fool has a disclosure policy.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Why Tesla stock jumped on Thursday appeared first on The Motley Fool Australia.

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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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COVID-19 vaccination levels, at least in the developed world, have now reached levels where many devastated industries are starting to rebuild.

One of those sectors is international education.

As such, Wilson Asset Management likes the look of IDP Education Ltd (ASX: IEL) in their WAM Capital Limited (ASX: WAM) and WAM Research Limited (ASX: WAX) portfolios.

“While international students await for clearer signs of Australian borders reopening, recent developments suggest an improving outlook into 2022,” said portfolio managers Matthew Haupt, Catriona Burns and Oscar Oberg in a memo to clients.

“We believe the market is underestimating IDP Education’s ability to capitalise on the recovery in the global education sector and drive market share gains, underpinning strong earnings growth over the medium term.”

IDP is in the business of placing international students into education institutions in Australia, as well as the US, the UK, Canada, New Zealand and Ireland. The Melbourne organisation also made a major acquisition in India back in July.

The company also distributes and administers International English Language Testing System (IELTS) tests.

“IDP Education is a co-owner of IELTS with the British Council and Cambridge Assessment,” read the Wilson memo.

Shares for IDP have already gained nearly 80% this year so far, and more than 50% since the start of July. 

But the Wilson trio reckons they are far from a peak yet.

IDP’s very upbeat trading update this week

Haupt, Burns and Oberg were especially impressed with the company’s update presented at its annual general meeting on Tuesday.

They noted that, as international borders rapidly reopen, IDP’s international student placement business has already seen a 120% year-on-year increase in those heading to the northern hemisphere.

“The company provided a positive first quarter FY2022 trading update at its annual general meeting, noting a strong recovery across its global network, with IELTS testing volumes increasing by 84% compared to the prior year,” the Wilson memo read.

“Over the past 5 years, the company has invested substantially in research and development, and is now in the early stages of monetising an industry-leading digital platform, disrupting the traditional student placement model.”

The Wilson team is not the only one bullish on IDP. Last week Morgan Stanley upgraded its price target to $40.20 while keeping it at “overweight” status.

IDP shares closed Thursday at $37.12, giving it a market capitalisation of more than $10.3 billion.

The post The ASX share showing explosive post-COVID growth appeared first on The Motley Fool Australia.

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Motley Fool contributor Tony Yoo has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Idp Education Pty Ltd. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Wisr Ltd (ASX: WZR) share price is trading slightly higher on Friday after the company released an upbeat first-quarter trading update.

At the time of writing, the Wisr share price is up 1.79% to 28.5 cents.

Wisr hits another quarter of growth

Wisr was pleased to deliver its 21st consecutive quarter of loan growth, originating $132 million of new loans in the September quarter. That’s up 113% on 1Q21.

Similarly, the Wisr Warehouse Loan Book balance surged 239% against the prior corresponding period to $451 million.

The company’s total loan originations sat at $743 million as of 30 September. That is up 142% compared to a year ago.

The company believes it’s well-positioned to continue its strong growth trajectory. It is also confident it can reach its medium-term goal of a wholly owned $1 billion loan book.

Management commentary

Speaking on the milestone that’s possibly driving the Wisr share price today, CEO Anthony Nantes said:

Twenty-one straight quarters of new loan growth is a fantastic achievement. Looking to the next quarter and beyond into H2, there is such a massive runway of growth ahead of us in the markets of auto finance and personal loans as lockdown restrictions start to lift; consumer demand will only grow. Combined with our new $225 million Wisr Secured Vehicle Warehouse coming into effect in Q2 FY22, we’re in an incredibly strong position to continue to deliver sustained growth.

A range-bound Wisr share price

The Wisr share price has largely been range-bound ever since its $50 million capital raising back in June.

New shares under the placement were offered at 25 cents. That’s a massive 21.9% discount to Wisr’s last closing price before the capital raising.

Not only were institutional investors offered a significant discount, but the raise itself represented 18.2% of the company’s existing shares on issue.

The Wisr share price has since tested lows of around 25 cents, but struggled to hold above 31 cents.

The post Wisr (ASX:WZR) share price edges higher on another record quarterly result appeared first on The Motley Fool Australia.

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Motley Fool contributor Kerry Sun has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The De Grey Mining Limited (ASX: DEG) share price has returned from its trading halt and is tumbling lower on Friday.

At the time of writing, the gold developer’s shares are 9% to $1.10.

Why is the De Grey Mining share price tumbling?

The De Grey Mining share price is under pressure today after announcing the successful completion of its fully underwritten $125 million institutional placement.

According to the release, the company has received firm commitments for the placement of approximately 113.6 million shares at a price of $1.10 per new share. This represents a 9% discount to its last close price.

Management advised that the placement bookbuild saw strong demand from domestic and offshore institutions. It feels this provides a strong endorsement of the company’s Mallina Gold Project and its strategic plan.

Unfortunately for retail shareholders, they were left out of this equity raising. There will be no share purchase plan accompanying the institutional placement.

Why is the company raising funds?

The release notes that the placement proceeds will be used primarily to fund the commencement and completion of the prefeasibility study of the Mallina Gold Project, resource extension and definition drilling at Hemi and the regional deposits, and regional exploration activities targeting new large-scale discoveries.

De Grey’s Managing Director, Glenn Jardine, commented: “The Placement provides De Grey with a significant capital runway to undertake exploration activities to expand the existing resource, and progress project development studies. De Grey will now have a significantly strengthened balance sheet which provides a strong platform to unlock further value at Mallina.”

Following today’s pullback, the De Grey Mining share price is now trading flat for the year. This compares to a gain of almost 11% for the S&P/ASX 200 Index (ASX: XJO) over the same period.

The post De Grey Mining (ASX:DEG) share price sinks 9% after raising $125m appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Laybuy Holdings Ltd (ASX: LBY) share price is charging upwards today. This follows the release of a quarterly trading update from the buy now, pay later (BNPL) services provider.

At the time of writing, shares in Laybuy are fetching 56 cents per share, up 14.4%. Despite this, the small-cap is still a distance from its 52-week high of $1.81 set back in October 2020.

Let’s take a closer inspection of today’s freshly released details.

What’s moving the Laybuy share price today?

In this morning’s update, the instalment payment company shared details of its existing and new debt facilities as well as an update on trading for the quarter ended 30 September 2021.

The market appears to be welcoming the information contained in the price-sensitive announcement. For those short on time, here’s a quick summary of the highlights:

• New debt facility secured for £30 million to support UK loan book growth
• Kiwibank loan facility limit increased to NZ$30 million
• Achieved a record Gross merchanise value (GMV) of NZ$206 million in Q2
• September GMV reached a record NZ$78.5 million
• Active customers up 57% to 889,000
• Active merchants up 86% to 11,700

What happened during the quarter?

For Laybuy, it was a quarter of positioning for further growth and flexibility in Q2 FY22. Namely, the company’s changes to its loan facilities.

In Q2, a new debt facility was signed with US-based lending provider, Partners for Growth (PFG). This £30 million facility will be used to extend and accelerate Laybuy’s growth in its fast-growing United Kingdom operations.

In addition, the BNPL player was able to increase its facility with Kiwibank from NZ$20 million to NZ$30 million. Along with the increase in value, the Kiwibank facility has been extended to 30 June 2023. As a result of these loan changes, Laybuy states it now has funding to support GMV of up to NZ$2 billion.

Speaking of GMV, the latest quarter has been a record period for the company in terms of GMV on an annualised basis. In Q2, Laybuy’s GMV reached a record NZ$206 million, which when annualised comes to NZ$825 million. This represents an increase of 62% year-over-year. These record achievements bode well for the Laybuy share price.

Meanwhile, gross merchandise value experienced a substantial surge in the UK, increasing 93% year over year on an annualised basis to NZ$446 million.

Commenting on this, Laybuy managing director Gary Rohloff said:

We continue to deliver against our strategy and have again seen strong growth in GMV in quarter two of FY22.

Since September 2020, we have added more than 5,400 active merchants and have added 321,000 new active customers, which is helping drive impressive growth across all regions, particularly in our growth market of the UK. This is particularly pleasing as the company heads towards the busy Christmas season.

Since then

A positive for the Laybuy share price, the company has since experienced additional growth in October. According to the release, active customers have now surpassed 900,000. Concurrently, active merchants and active UK merchants exceeded 12,000 and 3,000 respectively.

The company reiterated that it remains on track to reach its $1 billion GMV target for FY22.

The post Laybuy (ASX:LBY) share price surges 14% on record quarterly appeared first on The Motley Fool Australia.

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Motley Fool contributor Mitchell Lawler has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Humm Group Ltd (ASX: HUM) share price opened slightly higher on Friday after the company delivered its first quarter results.

At the time of writing, the Humm share price is up 1.1% to 91.5 cents.

Humm growth momentum continues in FY22

Humm has recapped its September quarter, announcing another strong period of sustained growth. Some key highlights include:

• Group 1Q22 total transaction volume (TTV) rose 39.6% against the prior corresponding period (pcp) to $763.3 million
• BNPL TTV up 44.5% to $308.8 million
• Cards (Australia and New Zealand) volume up 7.6% to $249.4 million
• Commercial and leasing volume up 102.2% to $205.1 million
• Total hummgroup customers rose 6.1% to 2.7 million including a 16% increase in BNPL customers
• Net loss of $24.0 million, up 9.3%

Hummgroup’s total transaction volume increased 39.6%, reflecting a well-rounded performance from its diversified portfolio of financial products.

The company’s total customers sat at 2.7 million by the end of the September quarter, with a strong increase in BNPL customers offset by a decrease in customers associated with a number of “grandfathered consumer products”.

Humm’s BNPL segment, consisting of humm, bundll and hummpro delivered a 44.5% increase in TTV, driven by strong volume growth in its humm ‘Little things’ campaign in Australia.

The company noted that the higher income generating ‘Big Things’ volume growth of 2.5% was impacted by store closures across New South Wales, Victoria and Auckland. However, its ‘Little things’ volume surged 156.8% on pcp, predominately driven by e-commerce transactions during lockdown.

The BNPL segment flagged a net loss / average net receivables (ANR) of 5.9% in the first quarter, increasing by 120 basis points on pcp. The jump reflects the temporary increase in shorter duration BNPL products. Management forecasts the net loss / ANR for BNPL in 2Q22 to be in the range of 4.5% to 5%. By comparison, FY21 net losses / ANR sat at 3.5%.

Management commentary

Hummgroup CEO Rebecca James commented on the company’s growth trajectory, saying:

We are extremely pleased with the growth momentum across the Group considering key markets were predominantly in lockdown during the quarter. BNPL growth remains strong with humm ‘Little things’ in Australia up 157% in 1Q22 which more than offset the smaller growth of 3% in ‘Big things’ which was impacted by lockdowns.

The Company’s overall volume growth of 40% highlights the advantages of our diversified portfolio offering products able to finance smaller and larger items seamlessly, for both consumers and SMEs.

Humm share price snapshot

The Humm share price is down 18.2% year-to-date, broadly in line with the struggling BNPL sector.

The post Humm (ASX:HUM) share price edges higher on first quarter results appeared first on The Motley Fool Australia.

More reading

• These were the best performing ASX BNPL shares in September

Motley Fool contributor Kerry Sun has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Humm Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Magellan Financial Group Ltd (ASX: MFG) share price could be one to consider for the long-term.

There are a handful of brokers that think Magellan shares could be good value.

The brokers at Morgans and Macquarie Group Ltd (ASX: MQG) rate the fund manager as a buy.

Morgans’ price target on the Magellan share price is $54.85 and Macquarie’s price target on the fund manager is $38.

Magellan just held its annual general meeting (AGM) and outlined a number of things that could make it more interesting for investors.

Associates / Magellan Capital Partners

The long-term growth and optionality of associate investments is one of the things that brokers like Morgans are noticing.

These are businesses that Magellan itself has invested in, not just on behalf of investors.

So far, it has made three investments.

It bought around 15% of FinClear for $23 million, approximately 12% of Guzman y Gomez for $103 million and a 40% economic stake of Barrenjoey Capital Partners for $156 million.

Magellan said that FinClear provides important trading infrastructure, services and technology solutions that support businesses in wealth management and stockbroking. The fund manager said FinClear has grown strongly both organically and by acquisitions in an industry that has been consolidating.

Finclear recently completed a small capital raising at a price around “triple” Magellan’s average entry price and is likely to go through an initial public offering (IPO) sometime next year.

Guzman y Gomez, a quick service Mexican food chain, already has 158 restaurants. Most of them, 138, are in Australia, with the rest in Singapore, Japan and the US. Last year, sales totalled $445 million. It has plans to roll out 30 more restaurants next year. In Australia there are 1,000 McDonalds and 650 KFCs, especially as it continues its drive-thru offering, which Magellan said has “excellent” unit economics. Magellan said GYG has a long available pathway ahead, particularly in the US which it called a “vast” opportunity.

Barrenjoey, the new investment bank, is initially focused on four business lines: corporate finance, equities, fixed income and research.

Magellan said Barrenjoey is already achieving meaningful results and capturing meaningful market share. Despite not all business lines being up and running, Magellan said Barrenjoey has achieved more revenue than expected in the first three months of FY22, and was profitable.

The fund manager said that Barrenjoey’s current four current lines of business has an addressable market of around $5 billion of revenue.

These three businesses could be a helpful contributor to the Magellan share price over time.

Funds management growth

There has been questions by investors, including from brokers like Macquarie, that investment performance from its global equities segment hasn’t been strong, which could lead to outflows in FY22.

Firstly, Magellan pointed out that its main objectives are to achieve compounding returns of 9% per annum (net of fees), which it has achieved, and for the strategy to be lower risk than the overall share market.

However, the fund manager said that there are five other growth areas for the business including global listed infrastructure, Australian shares, sustainable/ESG investing, its exchange-traded fund (ETF) MFG Core Series and FuturePay – its retirement product.

Magellan says there is a substantial opportunity to build an Australian equities retail franchise.

The ‘sustainable’ strategies now has $500 million of funds under management (FUM), which has more than doubled in the last 12 months.

Magellan’s MFG Core Series is seeing “growing demand, with substantial capacity and more product opportunities”.

The fund manager said that its retirement product, FuturePay, has an extremely large market opportunity to try to help retirees achieve regular, stable income, capital growing and allowing access to their capital. Magellan also said that it has been approached by institutions about FuturePay.

Magellan share price valuation

Macquarie was attracted to Magellan’s valuation when it decided to call it a buy, with a price target of $38. It thinks the dividend yield is supportive of the valuation.

Based on Macquarie’s numbers, Magellan shares are valued at 16x FY22’s estimated earnings with a partially franked dividend yield of 6.3%.

The post 3 reasons why the Magellan (ASX:MFG) share price could be a buy appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison owns shares of Magellan Financial Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Aurizon Holdings Ltd (ASX: AZJ) share price is edging higher on Friday morning.

At the time of writing, the rail freight operator’s shares are up slightly to $3.92.

Why is the Aurizon share price rising?

The Aurizon share price is rising this morning after it announced a major acquisition.

According to the release, Aurizon has signed an agreement with Macquarie Group Ltd (ASX: MQG) subsidiary Macquarie Asset Management to acquire One Rail Australia (ORA) for $2.35 billion.

ORA comprises bulk rail haulage and general freight assets in South Australia and the Northern Territory (the 2,200km Tarcoola-to-Darwin railway line) and a haulage business in New South Wales and Queensland.

However, Aurizon plans to divest ORA’s New South Wales and Queensland East Coast Rail business through a demerger or a trade sale, whichever creates greater value for Aurizon shareholders. Until that time, the East Coast Rail business will be operated independently of the Aurizon with a separate CEO and management team. This is to address potential competition concerns from regulators.

“A strong, profitable business”

The release notes that One Rail Australia is a strong, profitable business with aggregate estimated earnings before interest, tax, depreciation and amortisation (EBITDA) of $220 million for calendar year 2021. This comprises Bulk EBITDA of ~$80 million and East Coast Rail EBITDA of ~$140 million.

The purchase remains subject to several customary conditions precedent and regulatory and consent conditions. This includes clearance from the Australian Competition and Consumer Commission (ACCC).

Aurizon’s Managing Director and CEO, Andrew Harding, believes the transaction is a unique opportunity to grow its business and create value for shareholders.

He commented: “The One Rail acquisition is highly strategic and transformative for Aurizon. It is fully aligned with Aurizon’s strategy to grow our Bulk freight business into new markets and new geographies in Australia.”

“At our Investor Strategy Day in June, we detailed our aspiration to double our earnings in the Bulk business over the coming decade. The One Rail acquisition delivers a step change for Aurizon Bulk as a new entrant in the SA and NT region, and supports the ongoing growth of non-coal revenue in the Aurizon portfolio. Upon completion of the transaction, with the integration of One Rail bulk and divestment of ECR, the Bulk share of Aurizon’s haulage revenue will represent around 40%.”

Mr Harding also highlights that the transaction gives the company opportunities to gain exposure to new economy metals, among other commodities.

He explained: “The ORA bulk infrastructure and operations in SA and NT provide customers with a safe, efficient and effective pathway to market for numerous existing commodities and growth opportunities in base metals, agriculture, iron ore and for new economy metals such as manganese and copper.”

The Aurizon share price is trading broadly flat in 2021.

The post Aurizon (ASX:AZJ) share price rises amid transformative $2.35bn acquisition appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited. The Motley Fool Australia has recommended Aurizon Holdings Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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