Emeco (EHL) H1 2025 earnings summary

Executive summary

• Achieved strong first-half results with 11% revenue growth (excluding discontinued contract mining), 6% increase in operating EBITDA to $146 million, and 15% rise in operating NPAT to $38 million, driven by new rental projects and cost savings.

• EBITDA margin expanded by 610 basis points to 38% and EBIT margin by 360 basis points to 18%, reflecting robust cost management and operational efficiency.

• Free cash flow increased 22% to $49 million, with cash flow conversion at 94% and leverage reduced to 0.84x, well below the 1x target.

• Rental business remains the primary earnings driver, with Force/Workshops maintenance services supporting capital efficiency.

• No dividends paid and capital management program remains suspended to prioritize debt reduction.

Financial highlights

• Revenue up 11% year-over-year to $387 million (excluding discontinued contract mining); operating EBITDA up 6% to $145.8 million; operating EBIT up 13% to $68.3 million; operating NPAT up 15% to $38.3 million.

• EBITDA margin increased from 32% to 38%; EBIT margin from 14% to 18% year-over-year.

• Free cash flow of $48.8 million, up 22% year-over-year; net debt reduced by $38 million.

• Basic EPS increased to 6.53 cents from 3.75 cents year-over-year.

• No income tax paid due to $281 million carried forward tax loss.

Outlook and guidance

• FY25 operating EBITDA guidance reiterated at least $300 million; 2H25 operating EBIT run-rate expected to drive ROC to ~18%.

• SIB CapEx for FY25 expected at $160–165 million (net of disposals $155–160 million); ERP spend for FY25 to be $7 million.

• Weather events in Queensland and WA may impact utilization and project timing.

• The business model now focuses on higher-margin core activities: mining fleet rental, maintenance, and rebuild services.

• Capital management program suspension continues for the second half of FY25.