AJ Lucas Group (AJL) H1 2025 earnings summary

Executive summary

• Revenue from continuing operations declined 2.2% to $75.9 million for the half year ended 31 December 2024 compared to the same period last year.

• Net loss after tax increased to $11.5 million from $2.5 million, mainly due to higher finance costs and adverse FX movements.

• Group EBITDA was $8.8 million for the six months to December 31, 2024, down from $10.6 million in the prior year period.

• Australian operations were impacted by the suspension at Grosvenor coal mine and client drilling delays, reducing EBITDA by 15% to $10.2 million.

• UK operations incurred $1.5 million in admin and other expenses, with some revenue from electricity sales at Elswick.

Financial highlights

• EBITDA fell 16.4% to $8.8 million; EBIT dropped 30.5% to $4.7 million year-over-year.

• Net finance costs rose 74.1% to $16.1 million, largely due to unrealised FX losses on USD-denominated debt.

• Net tangible asset backing per share decreased to (6.0) cents from (5.5) cents at June 2024.

• Cash and cash equivalents at period end were $8.6 million, down from $15.3 million at June 2024.

• Net cash from operating activities was $9.9 million, with $3.7 million used for plant and equipment and $12.9 million for debt and lease repayments.

Outlook and guidance

• Management remains optimistic on metallurgical coal demand and is focused on diversifying the drilling business.

• UK strategy centers on maintaining licences, cost control, and pursuing conventional gas opportunities while awaiting potential changes to the shale gas moratorium.

• Limited short-term prospects for change in the UK hydraulic fracturing moratorium.

• Management continues to seek new work to mitigate operational disruptions.