Release Date: February 12, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q: Can you discuss the corporate overhead costs from the OPS business and how they will be optimized moving forward? A: Shaun Hughes, Chief Financial Officer: The allocation for the second half will be roughly $5 million. We expect to maintain these levels for FY26 and start reducing costs from FY27 after stabilizing the glass business.
Q: How sustainable are the cost improvements in Saverglass if volumes return? A: Shaun Hughes, Chief Financial Officer: Some cost reductions will hold, such as synergies and insurance savings. However, profit sharing, which is required in France, will resume as business performance improves. We've also reduced the workforce by 3%, which should hold as volumes increase.
Q: Can you explain the adjustments made for the G1 closure and its impact on future earnings? A: Shaun Hughes, Chief Financial Officer: Post-G1 closure, we expect a normalized base for Gawler of mid-30s in EBIT. This includes the impact of the G3 rebuild and the $5 million overheads per half.
Q: What are the expected additional costs related to the G1 closure in the second half? A: Shaun Hughes, Chief Financial Officer: We anticipate around $20 million in onerous contract provisions, which we aim to renegotiate in the second half. The $84 million provision already includes decommissioning and potential redundancies.
Q: How does the order intake improvement impact future earnings, and is there any risk of re-timing? A: Brian Lowe, CEO: The order intake is the highest in 18 months, but we remain cautious due to past re-timing of orders. We expect the first quarter to be impacted by previous slow orders, with improvements in the fourth quarter.
Q: What is the impact of the aluminum supply chain and potential US tariffs on your business? A: Brian Lowe, CEO: Most of our aluminum comes from Korea, China, and Europe, so US tariffs should not significantly impact supply or costs. Aluminum costs are directly passed through to customers, minimizing exposure.
Q: How does the new can plant in New Zealand affect your market position? A: Brian Lowe, CEO: We don't see short to medium-term risks. Our major contracts in New Zealand are secured well beyond 2030, and we don't anticipate significant volume loss in the next 5-7 years.
Q: Can you clarify the impact of the change in depreciation and amortization policies on your financials? A: Shaun Hughes, Chief Financial Officer: We adjusted asset lives as part of our capital investment program. For Saverglass, mold life was extended, impacting depreciation by about AUD4 million. The G3 rebuild delay also affected depreciation timing.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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