K&S (KSC) H1 2025 earnings summary

Executive summary

• Operating revenue for the half-year ended 31 December 2024 was $383.5 million, down 9.3% compared to the same period last year.

• Statutory profit after tax was $16.1 million, a decrease of 3.1% year-over-year; underlying profit after tax was $16.4 million, down 3.4%.

• Underlying profit before tax for H1 FY2025 was $23.4 million, down 4.1% year-over-year.

• Australian Transport and New Zealand segments performed soundly, while K & S Fuels saw reduced contribution due to tighter trading conditions.

• Cost reduction initiatives and operational efficiencies positively impacted results.

Financial highlights

• EBIT for the half-year was $24.9 million, down 2.9% year-over-year; EBITDA was $46.2 million, down 4.2%.

• Operating cash flow was $26.7 million, $2.5 million lower than the prior period.

• Net borrowings (excluding lease liabilities) increased to $45.9 million from $22.2 million at June 2024.

• Total assets rose to $667.4 million, up 9.4% from the previous year.

• Interim dividend declared at 8.0 cents per share, down from 10.0 cents per share last year.

Outlook and guidance

• Second half earnings expected to be lower than the prior comparative period due to higher interest rates, cost pressures, customer contract losses, and lower construction activity.

• Some offset anticipated from price and margin improvements on select work parcels.

• Net debt expected to rise in the second half as property projects proceed, which are expected to be earnings accretive.

• Downside risks include higher interest rates, cost pressures, customer de-stocking, and lower construction activity.