- Contract services provider NRW Holdings (NWH) says financial results for the first half of FY22 were roughly in line with its expectations
- NRW recorded $1.16 billion in revenue which was a similar result to H1 FY21 and operating earnings before interest and taxes were up 26 per cent to $74.6 million
- Positively, the company has declared an interim dividend of 5.5 cents per share, which marks a 37 per cent increase to the prior year
- NRW strengthened its financial position with a healthy cash balance of nearly $196 million and reducing debt from $171.3 million on June 30 to $40 million on December 31, 2021
- Company shares are up 14.2 per cent to trade at $1.97
Contract services provider NRW Holdings (NWH) has reported H1 FY22 results which it said were roughly in line with its expectations.
The industrials stock recorded $1.16 billion in revenue, which was at a similar level to the prior corresponding period (pcp).
NRW said the similar result reflects a reduction of activity in its Civil division after the completion of multiple Pilbara-based projects offset by an increase in the Minerals, Energy and Technologies (MET) business mostly due to the acquisition of engineering business, Primero.
NRW’s three reportable segments include Civil, Mining, and MET. Its business activities are primarily conducted in Australia, with some in Canada and the US.
Operating EBIT was up 26 per cent on the prior corresponding period (pcp) to $74.6 million, which was at the higher end of NRW’s guidance for the six-month period. NRW said profitability recovered across the business due to lesser effects on the cost base from COVID-19.
As a result of the improved EBIT offset by lower depreciation costs, earnings before interest, tax, depreciation and amortisation (EBITDA) was up slightly from $132.8 million to $133.6 million.
Positively, the company declared an interim dividend of 5.5 cents per share, which marks a 37 per cent increase to that declared for H1 FY21. The dividend will be fully franked and paid on April 7.
Capital expenditure for the period totalled $66.8 million, of which roughly $24 million was for the new Karara Mining project, commencing next month, and $12 million on crushing plants for Build, Own, Operate (BOO) contracts in Primero.
NRW also increased its cash position to $195.9 million, which was supported by strong operating cashflows from increased earnings, resolving outstanding claims and from contract advances.
Net debt reduced from $171.3 million as at June 30, 2021, to $40 million by the end of the year.
“The results reflect what we said we would do. Activity levels are as we expected despite a series of challenges related to the COVID-19 pandemic. Earnings have recovered and delivered to the high end of guidance,” Managing Director and CEO Jules Pemberton said.
Looking ahead, NRW maintains its full-year revenue guidance of between $2.4 and $2.5 billion with secured work in hand for the second half of FY22 already fully supporting the revenue forecast.
EBITA for the full year has been updated to between $150 and $155 million to reflect the strong first-half results.
Company shares were up 14.2 per cent to trade at $1.97 at 2:15 pm AEDT.