Kelsian Group (KLS) H1 2025 earnings summary

Executive summary

• Revenue increased 9.1% year-over-year to $1,071.8 million, driven by new contracts, indexation benefits, and growth in Australian Bus, AAAHI, and Marine & Tourism segments.

• Underlying EBITDA rose 1.3% to $132.2 million, with a second-half earnings skew expected due to contract ramp-ups and seasonality.

• Underlying NPATA declined 7.9% to $39.7 million, mainly due to higher interest, depreciation, and operational challenges.

• Statutory NPAT was $20.1 million, down from $28.1 million in the prior year period.

• Interim dividend maintained at 8.0 cents per share, fully franked.

Financial highlights

• Revenue: $1,071.8 million (up 9.1% year-over-year), driven by new contracts and fare increases.

• Underlying EBITDA: $132.2 million (up 1.3% year-over-year); margin declined to 12.3% from 13.3% due to contract mix and cost pressures.

• Underlying NPATA: $39.7 million (down 7.9% year-over-year); statutory NPAT: $20.1 million.

• Cash conversion strong at 93%, with gross operating cash flow of $108.7 million.

• Sale of three WA bus depots expected to generate ~$20.3 million in proceeds.

Outlook and guidance

• FY25 underlying EBITDA guidance reiterated at $283–$295 million, with a stronger second half expected from contract ramp-ups and efficiency gains.

• Sustaining capex expected to peak in FY25 and fall below $85 million in FY26.

• Leverage forecast to fall below 2.5x by end FY26 as earnings grow and capex moderates.

• Portfolio review ongoing to improve returns, simplify the portfolio, and accelerate debt reduction.