EVN +0.22%: Delivered another year of record earnings and cash generation, but the result was more mixed against expectations than the headline growth rates suggest. The stock took a hit early as key earnings metrics missed consensus, before clawing its way back to positive territory.
Key results:
- Revenue of A$5.56bn, broadly in line with A$5.52bn expected.
- Earnings (EBITDA) of A$3.17bn, ~2% ahead of A$3.11bn expected.
- Net profit (NPAT) of A$1.48bn, ~8% below A$1.61bn expected.
- Adjusted earnings per share (EPS) of 77.1c, ~2% below 79.0c expected.
- Free cash flow of A$1.42bn, ~8% ahead of A$1.32bn expected.
- Final dividend of 21cps, taking FY26 dividends to 34.4cps, below the ~42.1c consensus.
The result therefore had something for both camps: operating earnings and cash flow were solid, but the bottom line fell short, while FY27 guidance didn’t provide enough upside to force meaningful earnings upgrades. Consensus has underlying NPAT to A$1.88bn in FY27, meaning EVN needs another strong year operationally to meet the market’s expectations.
MM’s view: A good result rather than a great one. We like the cash generation, improving shareholder returns and EVN’s exposure to both gold and copper, but after the stock’s strong run, expectations are understandably high. The initial weakness was justified given the NPAT and EPS misses; equally, the subsequent recovery suggests investors remain prepared to look through those misses given the strength of cash flow and commodity prices. We continue to hold EVN in the Active Growth Portfolio.
MM remains long and bullish EVN
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