MLG Oz Reports AUD 272.9m Revenue Up, Profit Falls to AUD 4.1m
MLG Oz Limited posted a 20.5% increase in revenue to AUD 272.9 million for the half-year ended December 2024, driven by strong gold industry activity. However, net profit after tax fell 42.7% to AUD 4.1 million, reflecting margin pressures and higher depreciation costs.
- Revenue up 20.5% to AUD 272.9 million
- Net profit after tax down 42.7% to AUD 4.1 million
- Lower crushing and screening revenues impacted margins
- Heavy capital investment increased depreciation expenses
- No interim dividend declared; second half expected to improve
Revenue Growth Driven by Gold Industry Activity
MLG Oz Limited has reported a robust 20.5% increase in revenue for the half-year ended 31 December 2024, reaching AUD 272.9 million compared to AUD 226.4 million in the prior corresponding period. This growth was primarily fueled by sustained high levels of activity across the gold industry and increased demand for MLG's integrated services, including bulk haulage, site services, and civil works.
Profitability Under Pressure Despite Revenue Gains
Despite the revenue surge, net profit after tax declined sharply by 42.7% to AUD 4.1 million, down from AUD 7.1 million in the previous period. The company attributed this decline to reduced profit margins, notably from lower revenues in its crushing and screening segment, which is typically a higher-margin service. The completion of several large contract crushing projects during the calendar year led to a temporary dip in this segment's contribution.
Capital Investment and Operational Costs Impact Margins
MLG Oz invested heavily in new capital equipment towards the end of FY2024 and into the current half-year, resulting in increased depreciation expenses that weighed on profitability. Additionally, the business incurred operational holding costs as it prepared fleet capacity for delayed projects, which have since begun to commence. These factors, combined with labour market constraints and unseasonal weather disruptions, further constrained margins.
Operational Outlook and Market Position
The company continues to experience strong organic growth through expanded service scopes and volume increases across its existing portfolio. While no new large projects were added during the period, MLG is optimistic about the second half of FY2025, expecting improved revenue and profit margins as delayed projects start and fleet capacity is deployed. The company also highlighted ongoing civil construction opportunities and a comprehensive training program to address labour shortages.
Dividend and Financial Position
MLG Oz did not declare an interim dividend for the period, maintaining a cautious stance amid margin pressures. The company’s balance sheet remains solid, with net tangible assets per share increasing to $1.02 from $0.94. The financial statements were audited with an unqualified opinion, underscoring the company’s compliance and financial integrity.
Bottom Line?
MLG Oz’s revenue momentum masks underlying margin challenges, setting the stage for a critical second half as new projects ramp up.
Questions in the middle?
- Will the anticipated second-half project commencements translate into sustained profit margin recovery?
- How will ongoing labour shortages and weather disruptions impact operational efficiency going forward?
- What is the company’s strategy to mitigate margin pressures from the crushing and screening segment?
