DGL Group Limited (ASX:DGL) Announces H1 FY25 Results
Financial Performance
DGL Group Limited reported a 10% increase in revenue for H1 FY25, reaching $239.1 million compared to $217.0 million in H1 FY24. Underlying EBITDA decreased by 13% to $26.0 million. Statutory Net Profit After Tax (NPAT) fell to ($2.2) million from $5.9 million in the previous year. Underlying NPAT was $1.7 million, a decline of 77%.
Operational Achievements
The company achieved positive volume growth across its divisions, now serving over 5,300 customers. The company reports strong performance in manufacturing, particularly in the crop protection sector, supported by capacity expansion with two new manufacturing sites and a new fleet. DGL completed the acquisition of a nationwide carrier of hazardous cargo and a bulk petrochemical storage business in NSW. Major group-wide system implementations of ERP & Finance, Logistics Management, and HR & Payroll systems are all due for completion this year. Site consolidations and sale of non-core properties are underway to reduce costs and improve efficiency.
Performance Challenges
DGL faced cost pressures from increased occupancy costs, headcount, and wage inflation, impacting profitability. The used lead acid battery recycling business struggled due to price competition, leading to restructuring efforts, while mining product profitability was negatively affected by mine site shutdowns and disruptions.
Financial Position
Net debt decreased by 11% to $102 million. Operating cash flow for H1 FY25 was $18.1 million, a 6.2% decrease from the previous year.
Strategy & Outlook
DGL is shifting its strategy from acquisitive growth to leveraging its extensive asset base to drive earnings growth. Focus areas include core divisions of Manufacturing, Logistics, and Environmental Services, with plans to expand into adjacent products and enhance service offerings.
Motley Fool contributor Matt Burgess 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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