SGH Ltd reported a stable half-year EBIT of $844 million alongside a robust 32% increase in operating cash flow, driven by solid performances at Boral and WesTrac. The company reaffirmed its FY26 guidance amid ongoing operational momentum and strategic initiatives.
- Underlying EBIT steady at $844 million, flat year-on-year
- Operating cash flow surged 32% to $1.08 billion
- Boral EBIT up 10%, Coates EBIT down 9%, WesTrac flat
- Leverage improved to 1.91x with strong liquidity position
- Safety metrics improved significantly across all divisions
Overview of SGH’s Half-Year Performance
SGH Ltd, a diversified industrial and energy powerhouse listed on the ASX, has released its half-year results for the six months ending December 2025, revealing a picture of steady earnings and improved cash generation. The company reported an underlying EBIT of $844 million, essentially unchanged from the previous corresponding period, while operating cash flow jumped 32% to $1.08 billion, reflecting enhanced cash conversion and working capital management.
Despite a slight 2% dip in revenue to $5.4 billion, SGH’s core businesses demonstrated resilience in a variable market environment. The company’s diversified portfolio, including industrial services, energy, and media, helped balance sector-specific headwinds and opportunities.
Segment Highlights, Mixed Fortunes but Positive Momentum
Within the industrial services segment, WesTrac’s EBIT remained flat at $348 million, supported by margin expansion and higher services revenue, despite a 6% revenue decline due to normalising capital sales. The ageing and growing equipment base underpins a positive outlook for parts and service demand.
Boral, Australia’s leading construction materials business, delivered a standout performance with EBIT rising 10% to $284 million, driven by volume growth, pricing discipline, and operational efficiencies. The company’s strategic investments in network expansion and cost control appear to be paying dividends, positioning it well for anticipated infrastructure and housing demand.
Conversely, Coates, the largest equipment hire business in Australia, experienced a 9% EBIT decline to $142 million, reflecting residual impacts from a softer second half in FY25. However, improving time utilisation and cost efficiencies suggest a recovery trajectory as infrastructure projects ramp up.
Energy and Media, Navigating Challenges and Opportunities
The energy segment faced production setbacks due to flooding in the Cooper Basin, with Beach Energy’s production down 7% and NPAT declining 8%. Nonetheless, progress on LNG projects such as Waitsia and Crux signals growth potential, with first gas expected in FY28 from Crux and ongoing development activities in Longtom.
On the media front, SGH completed the merger of Seven West Media and Southern Cross Media Group, creating a leading integrated platform with expected annual pre-tax cost synergies of $25–30 million. SGH holds a 20.1% stake in the merged entity, which is positioned for growth amid evolving media consumption trends.
Financial Strength and Strategic Outlook
SGH’s balance sheet remains robust, with net debt improving 4% to $4.0 billion and leverage reduced to 1.91 times EBITDA, comfortably below target ranges. The company benefits from strong lender support, refinancing at lower rates, and ample liquidity of $2.1 billion, underpinning its capacity to pursue organic and inorganic growth opportunities.
Looking ahead, SGH reiterated its FY26 guidance of low to mid single-digit EBIT growth, emphasizing disciplined execution of its operating model, stronger sales efforts to capture infrastructure demand, operational efficiencies through technology, and a clear focus on long-term total shareholder returns.
Bottom Line?
SGH’s balanced half-year results and strong cash flow set the stage for disciplined growth amid evolving market conditions.
Questions in the middle?
- How will the ongoing CEO succession at Boral impact its strategic direction and performance?
- What is the timeline and risk profile for SGH’s LNG projects reaching full production?
- Can Coates reverse its EBIT decline as infrastructure activity rebounds in the second half?