SGH Reports $523.5M Net Profit, Revenue Up 2.2% in H1 2024

Strong Financial Performance Amid Strategic Expansion

SGH Ltd (ASX: SGH) has delivered an impressive half-year financial report for the six months ended 31 December 2024, showcasing a 2.2% increase in revenue to $5.51 billion and a remarkable 174.5% surge in net profit attributable to members, reaching $523.5 million. This performance reflects the company’s diversified portfolio across industrial services, energy, and media, as well as the successful integration of recent strategic acquisitions.

The company’s underlying trading performance also improved, with net profit before finance expense and income tax rising 16.7% to $842.7 million. This growth was supported by strong contributions from key operating segments including WesTrac, Boral, and Coates, alongside equity accounted investments in Beach Energy and Seven West Media.

Operational Highlights and Segment Contributions

WesTrac, the authorised Caterpillar dealer in Western Australia and NSW/ACT, continued to perform solidly, benefiting from sustained demand in heavy equipment sales and support services. Boral, Australia’s leading integrated construction materials business, contributed significantly following SGH’s compulsory acquisition completion in July 2024, with segment revenue and EBITDA reflecting steady market conditions.

Coates, Australia’s largest equipment hire company, maintained its market leadership with a focus on operational efficiency and customer service. The Energy segment, comprising SGH Energy and a 30% stake in Beach Energy, delivered stable production and benefited from a partial impairment reversal on the divested Bivins Ranch asset. Media investments, notably the 40.2% stake in Seven West Media, experienced some impairment charges but remained a strategic holding within SGH’s portfolio.

Balance Sheet Strength and Capital Management

SGH’s balance sheet showed marked improvement with net tangible asset backing per share increasing to $6.13 from $4.67 in June 2024, reflecting asset revaluations and earnings retention. The company maintained a disciplined approach to capital management, with available undrawn borrowing facilities of $1.39 billion and a successful refinancing of syndicated loan facilities extending maturities to 2030 and 2032.

During the period, SGH divested its 50% joint venture interest in South Australian Road Services and liquidated its wholly owned Boral USA operations, streamlining its portfolio to focus on core Australian assets. The company also announced a fully franked interim dividend of 30 cents per share, signaling confidence in ongoing cash flow generation and shareholder returns.

Outlook and Strategic Considerations

SGH’s half-year results underscore the benefits of its diversified business model and strategic acquisitions, particularly the full ownership of Boral. The company’s focus on operational excellence, capital discipline, and portfolio optimisation positions it well to navigate market uncertainties. However, challenges remain in media investments and energy sector volatility, warranting close monitoring.

Investors will be watching how SGH leverages its strengthened balance sheet and cash flow to pursue growth opportunities while managing risks associated with commodity prices and regulatory environments.