Capral Posts 4% Revenue Rise Despite 7% Volume Drop in 1H25

Market Context and Financial Performance

Capral Limited, Australia's leading aluminium extruder and distributor, released its half-year results for the period ending June 30, 2025, reporting a performance largely in line with expectations despite ongoing market challenges. The company experienced a 7% decline in volume to 31,100 tonnes, reflecting subdued demand in both the industrial sector and residential construction, which continues to recover slowly.

However, sales revenue rose by 4% to $327 million, buoyed by higher aluminium prices linked to the London Metal Exchange (LME). This price effect helped offset the volume contraction, resulting in an underlying EBITDA of $27.7 million, slightly down from $28.7 million in the prior corresponding period. Underlying EBIT also dipped marginally to $16.1 million from $16.9 million, while net profit after tax increased modestly to $15.3 million, aided by a $2.5 million tax benefit.

Operational Efficiency and Balance Sheet Strength

Capral’s management highlighted operational efficiency, product development, and customer service as key drivers in maintaining market share against imports. The company’s strong balance sheet remains a cornerstone of its strategy, with net cash of $53 million and zero debt reported at the half-year mark. This financial strength supports ongoing shareholder returns, including a share buy-back program that returned $0.27 per share equivalent in the first half, compared to 18 cents per share in the previous year.

Strategic Expansion and Sustainability Commitments

In a strategic move to bolster its national footprint, Capral announced the acquisition of Comsupply, a Western Australia-based aluminium systems and hardware distributor with approximately $15 million in annual revenue. This acquisition, expected to complete in late August 2025, complements Capral’s existing distribution network and technical capabilities, particularly in the Western Australian market.

On the sustainability front, Capral reaffirmed its commitment to achieving carbon emission reduction targets by 2030 and compliance with the Aluminium Stewardship Initiative standards. The company is advancing its environmental, social, and governance (ESG) agenda through enhanced reporting and product lifecycle assessments, aligning with broader industry trends toward responsible production and sourcing.

Outlook and Market Dynamics

Looking ahead, Capral anticipates an improvement in the residential housing market in the second half of 2025, driven by lower interest rates and pent-up demand. Conversely, the industrial sector is expected to soften, with transport demand easing from historical highs and infrastructure projects winding down. The company plans to focus on maintaining market position, optimizing costs, and managing working capital, while leveraging its balance sheet and product portfolio to pursue growth opportunities.

Capral’s FY25 EBITDA guidance remains broadly in line with the prior year, assuming no unforeseen disruptions. The ongoing on-market share buy-back program, announced earlier in the year, will continue through 2025, signaling confidence in the company’s financial health and strategic direction.