SGH Ltd (ASX:SGH) Presents Half-Year Results
Financial Performance
SGH Ltd reported revenue of $5.51 billion for the six months ended December 2024, a 2.4% increase from the previous year. Earnings before interest, tax, depreciation, and amortisation (EBITDA) rose by 8% to $1.10 billion. Underlying EBIT increased by 10.3% to $843.0 million, while net profit after tax (NPAT) grew by 7.0% to $507.7 million. Operating cash flow improved by 15% to $821.4 million. The company declared an interim dividend of 30 cents per share, representing a 30% increase on the prior corresponding period.
Business Unit Highlights
In Industrial Services, revenue grew by 8% to $3.2 billion, supported by strong customer demand and disciplined execution, resulting in an EBIT increase of 5% to $352 million. Boral’s revenue was slightly down by 2% at $1.81 billion, but EBIT surged by 29% to $259 million due to cost management and pricing strategies. Coates reported a 4% revenue decline to $546 million, with EBIT decreasing by 2% to $156 million, offset by improved operating efficiencies. SGH Energy saw a 15% rise in revenue to $237 million and a significant 37% increase in NPAT to $173 million. Seven West Media, with a 40% stake, experienced a 6% drop in revenue and a 41% decline in NPAT, while property and other investments continued their strategic developments.
Capital Allocation
SGH Ltd continues its disciplined capital allocation strategy, focusing on deleveraging the balance sheet to an adjusted net debt to EBITDA ratio of 2.0x. The company plans to invest in growth opportunities, including Boral’s Heavy Mobile Equipment fleet renewal and construction projects. Additionally, SGH has extended its corporate facility to FY30/FY32, lowering borrowing costs to 4.8% and increasing the tenor to 4.8 years.
Safety and Sustainability
SGH has made significant improvements in safety metrics, with a 9% reduction in Lost Time Injury Frequency Rate (LTIFR) and a 12% decrease in Total Recordable Injury Frequency Rate (TRIFR). Sustainability initiatives include the completion of the Boral Berrima Bypass, capable of utilising 45% alternative fuels annually, and the commissioning of the Moomba Carbon Capture and Storage (CCS) facility, which injected over 300 ktCO₂ in Q2.
Financial Outlook
SGH Ltd provided a positive outlook for FY25, expecting high single-digit EBIT growth supported by strong performance across core sectors. The company aims to continue deleveraging its balance sheet while enhancing operational efficiencies and expanding its capital sales and services pipelines.
Motley Fool contributor Abbie Stokes has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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