• Revenue: $5.5 billion, up 2%.
• EBIT: $843 million, up 10%.
• NPAT: $508 million, up 7%.
• Operating Cash Flow: $821 million, up 15%.
• EBITDA Cash Conversion: Improved to 75%.
• WesTrac Revenue: $3.2 billion, up 8%.
• WesTrac EBIT: $352 million, up 5%.
• Boral Revenue: $1.8 billion, down 2%.
• Boral EBIT Margin: 14.3%, significantly up.
• Boral EBIT: $259 million, up 29%.
• Coates Revenue: $546 million, down 4%.
• Coates EBIT Margin: 28.6%.
• Beach Production Growth: 15% to 10.2 million bboe.
• Beach NPAT Growth: 37%.
• Seven West Media Revenue: $727 million, down 6%.
• Seven West Media NPAT: $37 million, down 41%.
• Interim Dividend: Increased by 30% to $0.30 per share.
• Net Debt: Increased by $248 million to $4.6 billion.
• Leverage Ratio: 2.18 times net debt to EBITDA.

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Release Date: February 10, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• SGH Ltd (ASX:SGH) reported a 10% increase in EBIT to $843 million, driven by earnings expansion across WesTrac, Boral, and Beach.
• The company achieved a 15% increase in operating cash flow to $820 million, reflecting stronger earnings and improved EBITDA cash conversion.
• Boral delivered a significant 29% uplift in EBIT to $259 million, supported by pricing traction and performance improvement initiatives.
• Beach Energy reported a 37% increase in NPAT, driven by a 15% growth in production and a 20% reduction in operating costs per barrel.
• SGH Ltd (ASX:SGH) increased its interim dividend by 30% to $0.30 per share, marking the 30th consecutive period of stable or growing dividends.

Negative Points

• Seven West Media's revenue declined by 6%, leading to a 41% contraction in NPAT to $37 million.
• Coates reported a 4% decline in revenue, attributed to lower activity in Victoria and the sale of Coates Indonesia.
• The EBIT margin for WesTrac contracted slightly to 11.1%, impacted by a parts price reduction.
• SGH Ltd (ASX:SGH) faced a 14% increase in net finance expenses, largely due to increased net debt from the Boral acquisition.
• The company experienced a $32 million mark-to-market impairment of its Seven West Media investment, contributing to significant item losses.

Q & A Highlights

Q: Ryan, regarding Boral's EBIT margins of 14.3%, do you think these targets should be set higher? A: Ryan Stokes, CEO: We initially aimed for low teen EBIT margins, but we've seen significant performance improvements. While we're currently at low teens, we aim for mid-teens through FY26 and beyond. There's potential for further improvement, but it will take time.

Q: Richard, regarding Boral's seasonality, is it more first-half weighted? A: Richard Richards, CFO: Boral's seasonality reflects factors like Easter and ANZAC Day in the second half. The 54/46 split from last year is a good reflection for FY25.

Q: Ryan, despite a strong first half, why hasn't the guidance changed? Is Coates holding you back? A: Ryan Stokes, CEO: There are visibility concerns for the second half, including parts price dynamics at WesTrac. These factors affect the upper end of our guidance, so it's prudent to maintain it as is.

Q: Niraj, regarding Boral's SG&A efficiencies, how much is cyclical versus sustainable? A: Ryan Stokes, CEO: We see current efficiencies as sustainable, embedded into Boral's operations. While we're mid-cycle, there's potential for further improvement as network performance enhances.

Q: Peter, regarding WesTrac's parts pricing and US dollar strength, what are your expectations? A: Ryan Stokes, CEO: Parts pricing is set twice a year. The current reduction is similar to July 1, impacting the second half. Currency movements are positive, but we lack visibility for FY26.

Q: Ramoun, regarding Boral's gross margin improvement, what's driving it? A: Ryan Stokes, CEO: Pricing has been a significant factor, particularly in concrete. Cost management and efficiency improvements across the cost structure have also contributed.

Q: Brook, regarding WesTrac's parts price dynamic, what was the EBIT headwind in the December half? A: Richard Richards, CFO: The revaluation impact was about $36 million. Despite this, we saw an increase in lines shipped and average cost per line, indicating larger component rebuild work.

Q: Joseph, regarding WesTrac's inventory and machine deliveries, how does it look for FY26? A: Richard Richards, CFO: In-transit inventory is up slightly, reflecting strong delivery cycles, especially for mining machines. This supports our outlook for the remainder of the year, with efforts to lock in next year's order book.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.