Rail freight operator Aurizon Holdings has had a stellar few months, more than doubling its profit to $308 million.

The massive increase has come in the six months to December 2014.

Underlying earnings, which are tallied without one-off items, grew more modestly, up just 15 per cent.

Analysts say this is because profits in the half year ended December 2013 were hit by redundancy costs and asset write-downs.

But the solid result in the latest report was driven by cost control and productivity improvement amid a low-growth environment, Aurizon chief executive officer Lance Hockridge says.

But Mr Hockridge has warned that his company’s Pilbara rail and port expansion would be very “challenging” if iron ore prices stay low.

He said that cash could even be returned to investors, if the project was scrapped.

Mr Hockridge also warned that Aurizon’s Galilee Basin rail and port project in Queensland - developed with miner GVK Hancock – would not start until “the back end of this decade” and continues to depend on the price of thermal coal, which has also fallen sharply.

The company says it will haul 210-220 million tonnes of coal this financial year.

Iron ore haulage is expected to reach 23 million tonnes.

Aurizon - formerly the Queensland Government-owned QR National before being publicly listed - increased its interim dividend by 26 per cent to 10.1 cents per share.