Range International Limited delivered a standout Q4 2024 with record sales revenue from its Re>Pal Indonesia operations, alongside improved margins and positive cash flow, signaling a robust turnaround.
- Q4 2024 revenue rose 26% quarter-on-quarter to US$631k
- Pallet deliveries increased 19% from Q3 and 35% above 2023 average
- Gross margin improved to 33% in Q4 with positive EBITDA of US$76k
- Group cash flow turned positive by US$107k, a significant improvement
- Board progressing growth initiatives including pallet rentals and regional expansion
Record Sales and Operational Momentum
Range International Limited (ASX: RAN) has reported a strong finish to 2024, with its Indonesian manufacturing arm, Re>Pal, posting record quarterly sales revenue of US$631,000 in Q4. This represents a 26% increase over the previous quarter and a 56% rise compared to the 2023 quarterly average, underscoring the company’s accelerating growth trajectory.
The company delivered 38,963 pallets in the quarter, marking a 19% uplift from Q3 and a 35% increase on the prior year average. These figures reflect not only rising demand but also the effectiveness of recent sales initiatives, including winning back former customers and onboarding new clients trialing Re>Pal’s zero-waste plastic pallets.
Improved Margins and Cash Flow Stability
Re>Pal Indonesia achieved a gross margin of 33% in Q4, a notable improvement that contributed to an EBITDA profit of US$76,000. While the average gross margin for 2024 was slightly lower than 2023’s 30%, this was attributed to increased inventory levels as the company prepared for anticipated demand growth. The two-year average gross margin of 29% marks a dramatic turnaround from deeply negative margins seen in 2020 and 2021, highlighting the success of operational restructuring and cost control measures.
On the cash flow front, Range International reported a positive operating cash flow of US$107,000 for the quarter, a US$331,000 improvement from Q3. This was achieved despite maintaining higher inventory levels, signaling improved working capital management and operational efficiency.
Strategic Growth Initiatives and Market Expansion
With its ASX listing reinstated in January 2025, Range International is positioning itself for expansion beyond Indonesia. The Board is actively pursuing growth opportunities including pallet rental services, which leverage the durability of Re>Pal’s products for longer lifecycle use, and geographic expansion into markets like the Philippines and Vietnam. Discussions are underway for potential joint ventures in Manila, targeting multinational customers and leveraging local regulatory support for plastic recycling.
Additionally, the company is exploring new product lines using its compression molding technology to produce higher-value building materials from recycled plastics. These initiatives aim to enhance profitability and diversify revenue streams beyond pallet manufacturing.
Ongoing Challenges and Legal Matters
Range International continues to manage legal proceedings related to a disputed 2018 Indonesian tax assessment, with hearings expected to conclude by late 2025. While no material changes have arisen from these cases, they remain a watchpoint for investors. The Board also rejected a non-binding indicative offer in December 2024, citing undervaluation and onerous conditions, reflecting confidence in the company’s intrinsic value and growth prospects.
Overall, Range International’s Q4 results and strategic outlook suggest a company emerging from a challenging restructuring phase into a period of operational stability and growth potential, albeit with some external uncertainties to navigate.
Bottom Line?
Range International’s record Q4 and strategic moves set the stage for a pivotal 2025 amid ongoing legal and market uncertainties.
Questions in the middle?
- How will the Indonesian tax dispute resolution impact Range International’s financials and operations?
- What is the timeline and likelihood of securing binding joint ventures in the Philippines and Vietnam?
- How quickly can the company scale its pallet rental and new product lines to materially boost margins?