Southern Cross Electrical Engineering reports a statutory loss of $12.8 million for H1 2025, impacted by WestConnex dispute costs, yet declares a fully franked interim dividend of 2.5 cents per share.
- Statutory net loss of $12.8 million for H1 2025
- Underlying EBITDA down 12.2% to $35.4 million
- Underlying EBIT up 30.8% excluding WestConnex dispute costs
- Interim dividend declared at 2.5 cents per share, fully franked
- Net tangible asset backing per share dropped to 7.6 cents
Statutory Loss Reflects WestConnex Dispute Impact
Southern Cross Electrical Engineering Limited (ASX, SXE) has revealed a statutory net loss after tax of $12.783 million for the half year ended 31 December 2025, a sharp reversal from the $16.178 million profit recorded in the same period last year. This downturn is primarily attributed to significant costs associated with the ongoing WestConnex dispute, which have been excluded from the company’s underlying earnings metrics.
Underlying Performance Shows Mixed Signals
Despite the statutory loss, the company’s underlying earnings before interest, tax, depreciation and amortisation (EBITDA) declined by 12.2% to $35.433 million, reflecting some operational pressures. However, underlying earnings before interest and tax (EBIT) rose by 30.8% to $8.351 million when excluding the WestConnex dispute costs, suggesting that core business activities remain resilient amid external challenges.
Dividend Maintained Amid Financial Strain
In a move that may reassure investors, Southern Cross Electrical Engineering declared a fully franked interim dividend of 2.5 cents per share, payable on 22 April 2026. The company’s Dividend Reinvestment Plan will also apply, allowing shareholders to reinvest dividends into additional shares. This decision signals confidence in the company’s cash flow and future prospects despite the current financial headwinds.
Balance Sheet and Asset Backing Under Pressure
One notable concern is the sharp decline in net tangible asset backing per share, which fell from 30.3 cents to just 7.6 cents over the year. This significant drop highlights the impact of the losses and dispute costs on the company’s balance sheet strength, raising questions about asset valuation and capital adequacy going forward.
Looking Ahead
The company reported no changes to its controlled entities or joint ventures during the period, maintaining operational stability in that regard. However, the resolution of the WestConnex dispute remains a critical factor for future financial performance. Investors will be watching closely for updates on this front, as well as any guidance on how the company plans to restore its net tangible asset position and sustain dividend payments.
Bottom Line?
SCEE’s next moves on the WestConnex dispute and balance sheet repair will be pivotal for restoring investor confidence.
Questions in the middle?
- What is the expected timeline and financial impact of resolving the WestConnex dispute?
- Can Southern Cross Electrical Engineering sustain its dividend amid ongoing losses?
- How will the company address the steep decline in net tangible asset backing?