* Dividend payout raised to 70-100 percent of net profit
* Flat outlook for year ahead
* Shares up 4 pct on dividend surprise (Adds CEO comments, share price reaction)
MELBOURNE, Aug 17 (Reuters) - Aurizon Holdings AZJ.AX , Australia's top coal hauler, raised its dividend payout well above expectations after reporting a 15 percent rise in profit on Monday, with growth opportunities limited by a slump in coal and iron ore markets.
Aurizon's shares jumped as much as 4.3 percent on the announcement, and are up more than 13 percent this year.
Underlying net profit rose to A$604 million ($445 million) for the year to June, in line with analysts' forecasts for a net profit of A$602 million, according to Thomson Reuters, underpinned by cost cuts.
The rail transport group raised its final dividend by 64 percent to 13.9 cents a share and decided to increase its payout ratio to between 70 and 100 percent as it won't be committing to any growth projects until late in calendar 2016.
Aurizon invested in the West Pilbara Iron Ore project last year with China's Baosteel before iron ore prices plunged and is also looking to build a rail line for Indian group GVK's Alpha coal project, which is on hold.
"The external environment will continue to provide challenges," Chief Executive Lance Hockridge said in a statement, adding that the company is still looking to expand in the long run.
On the West Pilbara project, Aurizon said it has slashed cost estimates for the rail and port by A$1.5 billion, or about a third of initial estimates, and said costs could be cut further on the contracting and funding front.
A final investment decision with Baosteel, South Korean steel giant POSCO 005490.KS and resources investor AMCI is due in late 2016.
"This current year is going to be a relatively flat year," Hockridge told reporters, with coal volumes expected to be steady at around 210 million to 220 million tonnes.
"We have subdued expectations, but nonetheless the momentum around the transformation in the business wll continue," he said, pointing to a new labour agreement which should give the company more flexibility in how it deploys workers.
($1 = 1.3569 Australian dollars)