Kelsian’s FY25 EBITDA Guidance Cut to $283–295M, Tourism Divestment Underway

FY25 Earnings Outlook Adjusted

Kelsian Group has updated the market with a trading update at the May 7, 2025 Macquarie Australia Conference, revising its FY25 underlying EBITDA guidance to a range between $283 million and $295 million. This adjustment reflects a cautious stance, tracking towards the lower end of its previously communicated range. The company attributes this tempered outlook partly to external factors such as the impact of Cyclone Alfred on its Queensland marine and tourism operations.

Operational Highlights and Contract Wins

Despite these challenges, Kelsian continues to demonstrate resilience and growth in its core operations. The group reported strong revenue growth driven by Western Sydney bus contracts, the Bankstown rail replacement project, and Swan Transit operations. Notably, the ramp-up of industrial contracts in the United States is progressing well, underscored by the renewal of the Woodlands Express bus service contract in Texas for an additional five years starting May 2025.

International expansion remains a focus, with the recent acquisition of Huyton Travel in the UK completed in February 2025 and additional route expansions in Singapore. These moves reinforce Kelsian’s diversified global footprint across multiple transport modes and geographies.

Tourism Portfolio Divestment and Strategic Focus

Kelsian is actively progressing the divestment of its tourism portfolio, which includes iconic Australian destinations such as the Whitsundays, K’gari, and Sydney Harbour. This portfolio, comprising 45 vessels, 52 buses and motorcoaches, and approximately 1,300 employees, generated double-digit EBITDA margins in FY24 but is being considered for sale to sharpen the group’s focus on core transport operations.

The company’s strategic priorities emphasize operational efficiencies, disciplined capital expenditure, and organic growth opportunities, particularly in capital-light areas. Efforts to renegotiate and extend key contracts, such as the Sydney Region 6 bus contract, are underway, alongside initiatives to improve service delivery and cost structures.

Financial Position and Future Outlook

Kelsian’s leverage improved to 2.9x as of March 31, 2025, down from 3.2x at the end of December 2024, reflecting prudent financial management. The group maintains its FY25 capital expenditure guidance, with no anticipated changes despite ongoing investments such as the new Kangaroo Island vessel construction.

Looking ahead, Kelsian expects continued revenue stability during key trading periods like Easter, with marine and tourism segments performing in line with prior years excluding cyclone-affected areas. The company also anticipates further growth in its US industrial services and full-year contributions from the Bankstown rail replacement project.