Qube (QUB) H1 2025 earnings summary

Executive summary

• Underlying revenue for H1 FY25 rose 28.4% to $2.09 billion, with EBITA up 14.0% to $178.8 million and NPATA up 1.3% to $143.0 million compared to H1 FY24, driven by organic growth, acquisitions, and robust agri activities despite headwinds like lower automotive volumes and industrial action.

• Statutory NPAT fell 5.9% to $105.7 million, impacted by lease accounting changes and discontinued operations.

• Fully franked interim dividend increased 2.5% to 4.1 cents per share, with a payout ratio of 51% of underlying EPSA.

• Achieved investment grade credit ratings (BBB, stable outlook) from Fitch and S&P, and issued $600 million in long-term senior unsecured notes.

• Asset sales of ~$297.1 million contracted, with proceeds to reduce interest expense and support strategic flexibility.

Financial highlights

• Underlying EBITA margin (excluding grain trading) improved to 10.0%–11.2%; group ROACE (excluding MLP rail terminals) steady at 10.5%.

• EBITDA margin declined to 14.3% from 16.0% due to high-revenue, low-margin grain trading.

• Net finance costs increased by AUD 12.5 million or 47.2% due to higher debt and interest rates.

• Cash conversion (excluding grain trading working capital) was 79% for the half.

• Maintenance capex at 94% of depreciation; gross capex $341.7 million, mainly for property, rolling stock, and mobile assets.

Outlook and guidance

• FY25 underlying NPATA and EPSA growth of at least 5% expected, driven by strong Operating Division earnings, offset by lower Associate contributions and higher costs.

• Gross capex forecast at $800–$850 million, partly offset by ~$297.1 million asset sales; maintenance capex to be 85–90% of depreciation.

• Net interest expense to be $20–$25 million above FY24, lower than previous guidance due to delayed MIRRAT acquisition.

• Operating division outlook is positive to stable across all markets; Patrick's and associates expected to perform marginally better, offset by weaker MICCO.

• Outlook assumes no material adverse changes in market, economic, or industrial conditions.