Release Date: February 26, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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.
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