Austin Engineering (ANG) H1 2025 earnings summary

Executive summary

• Revenue increased 18.5% to AUD 170.2 million, with strong growth in APAC and North America, and a solid order book up 22% year-over-year.

• Underlying EBITDA rose 22% to AUD 25.3 million, while underlying NPAT increased 16% to AUD 17.4 million; however, reported net profit after tax declined 28.5% to AUD 10.6 million due to higher costs and lower margins.

• The APAC region, especially Batam, doubled its earnings, while the US saw a 52% revenue increase and 35% profit growth.

• The Chile/South America segment experienced slower growth and margin pressure due to a new OEM contract and associated learning curve, but is expected to improve.

• Interim fully franked dividend increased 50% to 0.6c per share.

Financial highlights

• Group revenue rose 18.5% to AUD 170.2 million, with a 52% increase in North America, 8% in South America, and 4% in APAC.

• Underlying EBIT increased 22% to AUD 25.3 million; EBITDA margin improved to 14.9%, but reported EBITDA margin fell to 10.9% due to one-off costs.

• Net debt stood at AUD 10.5 million, mainly due to inventory build, with net debt to equity ratio at 7%.

• Operating cash flow was an outflow of AUD 3.5 million, mainly due to steel inventory and timing of major customer payments.

• Interim dividend increased 50% to AUD 0.006 per share, fully franked.

Outlook and guidance

• FY25 full year revenue guidance of approximately AUD 350 million and underlying EBIT of AUD 50 million is reiterated.

• Strong order book and pipeline in Australia and the US support confidence in continued growth.

• Margin improvement expected in the US as contract labor is replaced by direct employees; Chile/South America expected to return to profitability in H2.

• Steel inventory levels to normalize by year-end, releasing cash and improving working capital.

• Operating cash flow expected to strengthen in Q3 FY25, supported by strong order intake.