• Revenue: Increased by 18.5% to $170.2 million.
• United States Revenue: Increased by 52% from the prior corresponding period.
• Underlying EBITDA: Up 22% to $25.3 million.
• Net Debt: $10.5 million, after a $21 million increase in steel stocks.
• Order Book: Increased by 22%.
• Interim Dividend: Increased to $0.06 per share, up 50% from the prior period.
• Operating Cash Flow: Outflow of $3.5 million, primarily due to $21 million investment in steel inventory.
• APAC EBITDA Margin: Reached 21%, doubling against the prior year.
• North America EBITDA Growth: Increased by 35%.
• EBIT Guidance: Confirmed at $50 million for the full year.

• Warning! GuruFocus has detected 4 Warning Signs with AUSTF.

Release Date: February 26, 2025

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

Positive Points

• Revenue increased by 18.5% to $170.2 million, with significant growth in the United States (52%) and APAC regions.
• Underlying EBITDA rose by 22% to $25.3 million, showcasing strong operational performance.
• The order book increased by 22%, driven by strong demand in the Americas and a robust sales pipeline.
• The interim dividend was increased by 50% to $0.06 per share, reflecting confidence in future performance.
• The Austin 2.0 strategy continues to deliver results, with a compound annual growth rate of 30% in EBITDA over the past few years.

Negative Points

• Operating cash flow was an outflow of $3.5 million, primarily due to a $21 million investment in steel inventory.
• The Chilean operations faced challenges with a new OEM contract, impacting margins due to inefficiencies.
• There was a significant increase in subcontractor expenses, particularly in the US and Chile, due to rapid expansion.
• Foreign currency translation differences resulted in a $13 million turnaround, complicating tax situations.
• The company faced potential tariff issues in the US, necessitating supply chain reorganization and increased costs.

Q & A Highlights

Q: Can you explain the significant one-off expenses of $6.8 million and whether they will recur in the second half or FY26? A: David Singleton, CEO, explained that they prefer not to capitalize R&D expenses, opting to write them off as they occur. David Bonomini, CFO, added that some costs related to the Chile expansion and US facility finalization might continue into H2, but the overall expenses will be significantly lower than in H1.

Q: Regarding the inventory build, will it fully reverse by June 30 or December 31? A: David Singleton, CEO, stated they expect a significant reduction in inventory build in the second half as the steel purchased is being consumed. They aim for three to four times stock turns per annum and expect to be closer to that level by the end of June, releasing a lot of cash.

Q: How did the Australian side of the Asia Pacific segment perform in terms of margin? A: David Singleton, CEO, mentioned that they no longer disaggregate Australian operations due to integration with Batam. However, the Batam business is a significant driver of performance, and there are opportunities for continued margin growth in the APAC region.

Q: Have you changed your business approach with the doubling of subcontract expenses? A: David Bonomini, CFO, explained that the increase in contract costs is due to rapid growth in the US and Chile, requiring contract labor. They expect to rebalance the workforce in H2, improving efficiency.

Q: Can you elaborate on the impact of your steel purchasing program on working capital and stock turns? A: David Singleton, CEO, noted that the AustBuy program has improved purchase rates and secured order book risks. They plan to smooth steel supply and aim to keep working capital aligned with revenue growth. Approximately a quarter of the steel was for immediate growth, with the rest being strategic stocking.

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