Korvest (KOV) H1 2025 earnings summary

Executive summary

• 1H FY25 revenue decreased by 1.1% to $51.13m, impacted by reduced galvanising activity and project phasing.

• Net profit after tax declined 28.5% to $4.09m, affected by $670k one-off costs from galvanising operational issue and engineering claim.

• Margin contraction and lower profitability compared to 1H FY24 due to competitive pressures and increased costs.

• Record order book driven by two new major projects, with significant increase in project work expected in 2H FY25.

• Full year FY25 profit is expected to exceed FY24, supported by improved day-to-day and small project orders.

Financial highlights

• 1H FY25 sales were $51.13m, down 1.1% YoY; EBIT $5.78m, down 29.3%; NPAT $4.09m, down 28.5%; EPS 34.8c, down 29.1%.

• Operating cash flow strong at $7.12m, up from $6.88m in 1H FY24.

• Capital expenditure $2.1m, focused on new equipment, roll forming, and transport fleet expansion.

• Interim dividend of 25c per share, fully franked, with record date 14 Feb 2025 and payment date 7 Mar 2025.

• Record order book at period end.

Outlook and guidance

• Entering 2H FY25 with record order book due to two major infrastructure projects.

• Major project schedules indicate significant increase in 2H activity; full year FY25 profit expected to exceed FY24.

• Usual pipeline of small project and day-to-day work expected to continue.

• Working capital levels likely to rise with project commencements; markets expected to remain strong, subject to economic conditions.