Impro Precision Industries (1286) H2 2024 earnings summary

Executive summary

• Revenue grew 1.8% year-over-year to HK$4,686.8M, led by high horsepower engine (+58.6%) and aerospace (+26.8%) segments.

• Adjusted profit attributable to shareholders rose 15.7% to HK$615.5M; adjusted EBITDA up 8.5% to HK$1,318.6M.

• Gross profit margin increased by 1.5 percentage points to 27.1%.

• Operating cash flow reached HK$1,146.2M; net debt decreased by HK$32.5M.

• 2024 total dividend was 16.0 HK cents per share, with a payout ratio of 49% of adjusted profit.

Financial highlights

• Gross profit increased 7.7% year-over-year to HK$1,269.1M.

• Adjusted basic EPS rose 15.6% to 32.6 HK cents.

• Adjusted EBITDA margin improved to 28.1% from 26.4% year-over-year.

• Net profit margin increased to 13.8% from 12.7% year-over-year.

• Free cash inflow from operations was HK$456.2M.

Outlook and guidance

• 2025 sales growth forecasted at mid to high single digits year-over-year.

• High horsepower engine expected to become the largest sub-end market in 2025, driven by AI-related data center demand.

• Aerospace and medical end-markets projected for significant growth; energy end-market to remain weak.

• Ample liquidity with ~HK$2.3B undrawn banking facilities to support growth strategies.

• 2025 capex expected at HK$650M, with two-thirds allocated to Mexico SLP Campus.