Aztech Global (8AZ) H1 2024 earnings summary

Executive summary

• Net profit for 1H 2024 rose 8.7% year-over-year to $46.7 million, with net profit margin improving to 12.5% from 11.0% in 1H 2023.

• Revenue for 1H 2024 was $373.2 million, down 4% year-over-year, mainly due to lower sales in the manufacturing segment and production delays from heavy snowstorms in China in 1Q.

• Interim dividend of 5 cents per share declared, totaling $38.6 million and representing an 83% payout ratio, payable on 16 August 2024.

• Order book as of 30 July 2024 stands at $304.4 million, with most orders scheduled for completion within FY2024.

• Ongoing expansion of manufacturing capabilities in Malaysia and onboarding of new customers.

Financial highlights

• 2Q 2024 revenue increased 7.8% year-over-year to $244.6 million, contributing 66% of 1H revenue.

• Net cash position improved to $274.1 million as at 30 June 2024, with cash and bank balances at $279 million.

• Free cash flow of $57.1 million for 1H 2024 after $2.5 million in capital expenditure.

• Net asset value per share increased to 46 cents as at 30 June 2024, up from 45 cents at 31 December 2023.

• Operating cash flow for 1H 2024 was $59.6 million, up from $14.5 million in 1H 2023, driven by higher customer deposits.

Outlook and guidance

• Management remains cautious due to economic and inflationary pressures, trade and geopolitical tensions, and increased competition.

• Expects to remain profitable for FY2024 barring unforeseen circumstances.

• Plans to leverage strong balance sheet, enhance R&D, automate manufacturing, and expand plastic production capabilities in Malaysia, with mass production to start in 4Q 2024.

• Focus on integrating IoT and AI capabilities and ongoing customer engagement.