In This Article:
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Revenue: $1.27 billion, an increase of 7.9% on prior corresponding period (pcp).
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Underlying EBITDA: $73.6 million, up 16.4% on last year.
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EBITDA Margin: Improved by 40 basis points to 5.8%.
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Net Cash Position: $55.4 million, an improvement of $47.5 million since June.
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Operating Cash Flow Before Interest and Tax (OCFBIT): $90.6 million, with a conversion rate of 126%.
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Net Profit After Tax (NPAT): $33.1 million.
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Adjusted Earnings Per Share: $0.061 per share.
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Interim Dividend: $0.025 per share, a 25% increase on pcp.
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Telecommunications Revenue: $626 million, up 5% on last year.
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Utilities Revenue: $530 million, up 11.4% on pcp.
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Utilities EBITDA: $22.4 million, up 38% on pcp.
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Transport Revenue: $110.5 million, up 8.4% on pcp.
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Work in Hand: Increased by 17% to $5.9 billion.
Release Date: February 21, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Service Stream Ltd (ASX:SSM) reported strong financial performance with a 7.9% increase in revenue to $1.27 billion for the half year.
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The company achieved a significant 16.5% increase in underlying EBITDA to $73.6 million, reflecting improved operational efficiency.
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Service Stream Ltd (ASX:SSM) generated strong operating cash flows, resulting in an improved net cash position of $55.4 million.
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The utility division showed a substantial improvement in margins, with EBITDA margins increasing by 80 basis points to 4.2%.
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The company secured $1.1 billion in new contracts, maintaining a high retention rate of 94% across existing contracts.
Negative Points
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The telecommunications segment may experience minor seasonality, potentially affecting revenue distribution between the first and second halves.
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Corporate costs are expected to remain elevated due to ongoing expenses related to defense tenders, which have been delayed by six months.
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The company faces potential budgetary constraints in government transport agencies, which could impact future procurement processes.
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Adverse weather conditions did not provide the expected boost to telecommunications revenue in the first half, potentially affecting future performance.
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The utilities segment experienced a major shutdown maintenance program in the first half, which may not be replicated in the second half, affecting revenue consistency.
Q & A Highlights
Q: Can you provide insights on the seasonality of the Telco segment and its impact on the second half? A: Leigh Mackender, CEO, mentioned that while there is generally not much seasonality, there could be a minor impact of 1-2 basis points. The first half exceeded expectations, but the effect is relatively minor, and they wanted to provide that insight.