DGL Group (ASX:DGL) Releases FY25 Business Update
Financial Outlook
Despite weaker industrial conditions in Australia and New Zealand, DGL Group projects full-year FY25 revenue to slightly exceed FY24 levels. Unaudited revenue for the second half of FY25 is expected to align with the first half. Underlying EBITDA is anticipated to rise by 5% – 10% in the second half compared to the first, although full-year EBITDA is forecasted to decline by 15% – 20% relative to FY24. Net profit after tax (NPAT) for the second half of FY25 is expected to significantly surpass that of the first half, while full-year NPAT is projected to decrease by 55% – 65% compared to FY24.
Operational Performance
DGL’s manufacturing operations have shown strong performance year-to-date, especially in chemical formulation for the crop protection and automotive sectors. However, profitability in the AdBlue business has decreased due to normalized margins and increased competition. To mitigate margin pressures, DGL has optimized its production operations across Victoria and Western Australia. In logistics, chemical warehousing and transport have remained stable, though relocation costs have impacted profits. The Environmental division faces challenges from intensified competition in lead acid battery recycling, leading to the closure of the Laverton plant. Progress continues on the liquid waste treatment plant in Unanderra, with operations expected to commence in late H1 FY26. Additionally, DGL is advancing a major systems transition and consolidating operating sites to enhance productivity and reduce costs, with expected benefits in FY26.
Executive Comments
CEO Simon Henry said: “FY25 is an important year for DGL as we continue to transform the business. We are committed to delivering significant operational improvements this calendar year through integrating our acquisitions, introducing efficient group-wide systems, and enhancing productivity to improve profitability and drive organic growth. We are determined to achieve our objectives of accelerating growth and driving improved earnings.”
Motley Fool contributor Aaron Shaw has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
This article was generated using GPT-4o mini, a Large Language Model (LLM), to generate summaries of investing news. While AI is generating the content, we know better than to blindly trust our future robot overlords, and every article is edited and fact-checked by an editor holding the appropriate credentials. The Motley Fool Australia stands behind the work of our editorial team and takes ultimate responsibility for the content of everything published by The Capital Club.
