News: AZJ Aurizon half-year core profit drops 23 pct on coal slump

MELBOURNE, Feb 15 (Reuters) - Aurizon Holdings (AZJ) , Australia's top coal rail hauler, reported a 23 percent slide in first-half core profit on Monday, hit by weaker coal volumes and the loss of some contracts, and warned it saw little growth ahead except from cost cuts.

The company narrowed its forecast for coal volumes to between 204 million and 209 million tonnes for the year to June 2016, the second time it has trimmed the top end of its outlook this year.

"Our underlying business is strong and resilient but we need to respond rapidly in a very challenging business environment for our customers," Aurizon said.

Underlying profit fell to A$237 million for the six months to December from A$308 million a year earlier, hurt by a 5 percent drop in tonnages and an 11 percent drop in revenue. The result was just below a Citi forecast of A$241 million.

However it raised its half-year dividend by 12 percent to 11.3 cents a share.

The company reported a net loss of A$108 million, hit by A$426 million impairments on the Galilee Basin coal rail project it was working on with Indian firm GVK GVKP.NS and its partner, billionaire Gina Rineart's Hancock Prospecting, and the West Pilbara Iron Ore project.

Both projects have been put on ice due to supply gluts and weak prices in coal and iron ore markets.

Underlying earnings before interest and tax of A$403 million were in line with the company's profit warning in December.

Aurizon said it would cut its forecast capital spending by up to A$200 million for the next 18 months "due to a low growth environment" and said it planned to cut at least A$380 million in operating costs by June 2018 to shore up its profit margins.