Leading civil and mining contractor NRW Holdings (ASX: NWH)) has released its half-year results for the six months to 31 December 2021 and declared an increased interim dividend. Full-year revenue guidance was maintained but the forecast EBITDA range was upgraded.
- Revenue $1,160.0M and EBITDA of $133.6M – in line with guidance.
- Earnings (Operating EBIT) up 26% to $74.6M – high end of guidance.
- Significant improvement in capital management
- Cash balance at 31 December $195.9M
- Statutory cashflow from operations of $145.1M
- Cash conversion circa 113%
- Net debt reduced to $40.0M compared to $171.3M at 30 June (or $88.7M proforma post-Boggabri sale)
- Gearing at 7%
- Interim dividend declared at 5.5 cents per share (fully franked) up 37% on pcp.
- Safety – improvement in TRIFR from 6.11 to 4.70.
- Karara mining services contract executed ($702M), on schedule (commences March 2022).
- Contract renewals signed with Coronado Curragh Pty Ltd, CS Energy, Southern Cross Fertilisers and SIMEC.
- Primero secured circa $450M of new work, including $290M for Covalent Lithium.
“The results reflect what we said we would do,” managing director and CEO Jules Pemberton said.
“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. We have also made progress in resolving claims and that is reflected in significantly improved cashflows in the half.
“I want to take this opportunity to thank our workforce for their continued commitment and diligence. They have delivered projects in continuingly challenging circumstances and have done so safely. The results also highlight the importance of the acquisitions completed over the last five years.
“A key strategic imperative was to develop a more resilient business. These results demonstrate that resilience, particularly the strong contribution made by our Minerals, Energy & Technologies (MET) division, which comprises three of those acquisitions RCR Mining Technologies, DIAB Engineering and Primero, offsetting what we consider to be a relatively short down cycle in Civil iron ore.”
Revenue guidance for the full year remains between $2.4B to $2.5B with secured work in hand for the second six months already fully supporting the revenue forecast at the low end of the range.
Earnings guidance (EBITA) for the full year has been updated to $150.0M to $155.0M, reflecting the strong first half results. The business still has opportunities to improve as advised at the 2021 AGM. However, given potential impacts from changing COVID-19 measures (resulting from Omicron) a decision was made to maintain top-end of guidance.
The directors have declared an interim dividend of 5.5¢ per share, which compares to 4¢ per share declared for the six months ended 31 December 2020 (a 37% increase). The dividend will be fully franked and paid on 7 April 2022.