Interesting to see that H2 23 was in line with H1 23 : . revenue was down by 5 %yoy both during H1 and H2 (with better volume during H2), . despite this revenue decrease, underlying EBITDA was flat yoy both during H1 and H2, . cash flow and free cash flow were also comparable during the two halves. So, once again, their FY 23 results were above their guidance, by 8 % for EBITDA and by 10 % for NPAT.
As indicated by @PortfolioPlus, company's guidance for FY 24 is cautious, expecting underlying EBITDA decrease of 16 % and an underlying NPAT decrease of 24 %. According to their explanations, it is due to the expected weakness for residential building (40 % of their volumes), while they remain optimistic for their industrial business (46 % of their volumes). Based on their guidance, we can expect a free cash flow of around 22 m$ (excluding any effect of working capital), which still represents a 20 % free cash flow yield.
No doubt that it is a tough business, but the company is doing quite well to limit the decrease of their earnings. Like in FY 23, they will try again to recover the inflation impact in 2024 (able to do it in 2023, via a better sales mix and cost cutting).
Good to see that the company will continue to have an active share buyback in 2024 (up to 10 % of the capital).
Given that the company has now proved its ability to regularly deliver profitable earnings, its valuation continues to look modest with an EV/underlying EBITDA of around 2 x (based on their cautious guidance for 2024). This valuation also ignores the large amount of tax loss carried forward (100 m$+), which has now a better chance to be used.
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