SGH +6.14%: Had a strong first half, trading higher around ~$53 intra-day before fading, still closing at an all-time high. First-half net profit more than doubled, led by higher earnings from mining equipment business WesTrac and construction materials segment Boral.
- 1H25 earnings before interest & tax (Ebit) of $843m vs. $702m consensus, a ~20% beat.
- 1H25 net profit of $523.5m vs $188.9m yoy
- Interim dividend of 30cps vs. 23cps yoy
Boral is proving to be a great acquisition for the business as we see further improvement in margins despite lower sales volumes in residential construction and road building. Management didn’t upgrade guidance but did reaffirm expectations for high single-digit EBIT growth in FY25 – the business is expected to focus on mining production, infrastructure/construction, and the energy transition which will all benefit from macro tailwinds moving forward.
We like the business, though note the group’s 29% ownership stake of Beach Petroleum (BPT) will continue to be a drag on group earnings which may sideline some.
MM is cautiously bullish SGH
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