SGH (SGH) H1 2025 earnings summary

Executive summary

• Revenue rose 2.2% year-over-year to AUD 5.51 billion, with EBIT up 10% to AUD 843 million and NPAT up 7% to AUD 508 million, reflecting margin expansion and disciplined execution, driven by WesTrac, Boral, and Beach.

• Operating cash flow increased 15% to AUD 821 million, with EBITDA cash conversion improving to 75%.

• Interim dividend raised 30% to AUD 0.30 per share, fully franked, marking the 30th consecutive period of stable or growing dividends.

• Adjusted net debt/EBITDA leverage at 2.2x, with deleveraging a key priority.

• SGH completed the compulsory acquisition of Boral Limited in July 2024, issuing 6.65 million shares and paying AUD 85.9 million in cash.

Financial highlights

• Underlying EBITDA up 8% to AUD 1.1 billion; EBIT margin improved to 15.3%.

• Statutory NPAT surged 134% to AUD 526 million due to lower significant item losses and asset sales.

• Net tangible asset backing per share increased to AUD 6.13 from AUD 4.67 at June 2024.

• Return on equity increased to 21.4% from 17.3% year-over-year.

• Operating cash flow up 15% to AUD 821 million; net debt increased by AUD 248 million to AUD 4.6 billion.

Outlook and guidance

• Full-year guidance maintained for high single-digit EBIT growth in FY 2025.

• WesTrac outlook remains strong with robust capital sales and services pipeline; Boral volumes under pressure but supported by cost discipline and infrastructure activity.

• Coates expects recovery as infrastructure spending grows; Beach narrows FY 2025 production guidance to 18.5–20.5 MMboe.

• Management expects continued revenue recognition from long-term maintenance and repair contracts, with AUD 362.5 million in remaining performance obligations.

• Focus on deleveraging through operating cash flows, targeting net debt/EBITDA of 2x.