Aztech Global (8AZ) Q2 2024 earnings summary

Executive summary

• Net profit for 1H 2024 rose 8.7% year-over-year to $46.7M, with basic EPS of 6.04 cents and interim dividend of 5 cents per share declared, up 66.7% year-over-year and an 83% payout ratio.

• 1H 2024 revenue was $373.2M, down 4% year-over-year, impacted by production delays from heavy snowstorms in China in 1Q.

• Strong net cash position of $274.1M as at 30 June 2024, with free cash flow of $57.1M for 1H 2024.

• Secured an order book of $304.4M as at 30 July 2024, with most orders scheduled for completion within the year.

• Expansion at Pasir Gudang plant in Johor, Malaysia, with new plastic injection machines to be operational in 3Q and mass production in 4Q 2024.

Financial highlights

• 2Q 2024 revenue rose 7.8% year-over-year to $244.6M, contributing 66% of 1H revenue.

• 1H 2024 EBITDA increased 7.5% year-over-year to $59.9M; net profit margin improved to 12.5% from 11.0%.

• Profit before tax increased 7% year-over-year to $54.6M.

• Basic and diluted EPS rose 8.6% year-over-year to 6.04 cents.

• Cash and bank balances reached $279M as of 30 June 2024.

Outlook and guidance

• Cautious on economic prospects and inflationary pressures due to trade/geopolitical tensions and competition.

• Plans to leverage strong balance sheet, customer engagement, and new plastic production capabilities in Malaysia.

• Focus on enhancing R&D, automating production, and integrating IoT and AI capabilities.

• Pipeline includes three new products in commercial production and five more scheduled by end-2024.

• Expects to remain profitable for FY2024 barring unforeseen circumstances.