Mitchell Services (MSV) Q3 2025 TU earnings summary

Executive summary

• Q3 FY25 revenue reached $46.8m and EBITDA was $5.3m, with new projects beginning to contribute earnings.

• Strong financial performance at the end of Q3, with improvements expected to continue into Q4 and beyond.

• Investments in replacement projects and service offerings are beginning to yield positive results, with mobilisation costs and weather-related delays easing towards quarter-end.

• Loop decarbonisation business/joint venture exceeded expectations, with strong project performance, new clients, and engineering phases underway, representing a significant growth opportunity.

Financial highlights

• Q3 FY25 revenue declined 21% year-over-year to $46.8m; EBITDA fell 49% to $5.3m.

• EBITDA margin dropped to 11.4% from 17.8% year-over-year.

• Temporary working capital requirements increased due to improved performance and higher rig utilisation, with expectations for normalisation in future quarters.

• Working capital investment is expected to remain stable at AUD 28 million in the next quarter, with inventory at AUD 14 million and trade payables at AUD 18 million reflecting fully stocked sites.

• Net debt increased from $6.2m at 31 Dec 2024 to $14.2m at 31 Mar 2025 due to working capital needs.

Outlook and guidance

• Q4 is expected to show further improvement, with a strong run rate anticipated into the next financial year.

• Operating rig count expected to increase in Q4 FY25, targeting around 70 rigs by 1 July 2025, with no need for additional wins to reach this level.

• Steady state EBITDA margin at the 70+ rig run rate is expected in the high teens, with aspirations for 20%+ driven by specialist drilling and geotech projects.

• Shareholder returns anticipated to recommence after FY25 transition period and business normalisation.

• Increased gold sector enquiries expected to support future revenue, leveraging current record gold prices.