AJ Lucas Group (AJL) H2 2024 earnings summary

Executive summary

• Achieved record Australian drilling revenue of $159.1 million, up 0.9% year-over-year, and EBITDA of $31.2 million, up 19.9% year-over-year, driven by operational efficiency and strong coal sector demand.

• Net loss after tax was $0.7 million, a significant improvement from the prior year's $153.3 million loss, which included a $157.3 million non-cash impairment of UK exploration assets.

• Continued investment in new equipment and workforce development, with a focus on safety, retention, and operational excellence.

• Maintained a low-cost presence in the UK, focusing on conventional gas opportunities and holding significant shale gas licences despite regulatory headwinds.

Financial highlights

• Group EBITDA rose to $29.2 million from $23.6 million year-over-year, with Australian operations contributing $31.2 million.

• Revenue concentration from the largest customer reduced from 52.7% to 41.7%, with new customers acquired.

• Net finance costs decreased to $22.4 million from $23.3 million year-over-year.

• Deferred tax asset of $11.0 million recognized, reflecting confidence in future taxable profits.

• No dividends declared for the year.

Outlook and guidance

• Strong metallurgical coal prices expected to sustain demand for drilling services.

• Australian operations anticipate continued robust performance, supported by a strong order book and new market entrants.

• UK strategy focuses on cost-effective licence maintenance and pursuing opportunities for conventional gas production.