Downer Group – 2025 Interim Results Summary
Overall Tone
The report conveys a positive and confident tone, emphasizing that Downer’s turnaround strategy is on track. The company highlights improvements in earnings, cost efficiencies, and margin growth while acknowledging softer conditions in certain markets.
Key Financial Metrics (Compared to 1H24)
| Metric | 1H25 | 1H24 | Change |
|---|---|---|---|
| Revenue | $5.5bn | $5.79bn | ▼5.2% |
| EBITA | $204.4m | $149.1m | ▲37.1% |
| EBITA Margin | 3.7% | 2.6% | ▲1.1pp |
| NPATA | $127.3m | $74.9m | ▲70% |
| NPAT | $75.5m | $72.1m | ▲4.7% |
| Operating Cash Flow | $220.1m | $168.2m | ▲30.9% |
| Free Cash Flow | $112.5m | $19.9m | ▲>100% |
| Net Debt to EBITDA | 1.3x | 1.4x | Improved |
Revenue & Earnings Analysis
- Revenue decreased 5.2% due to divestments and reduced government transport spending.
- EBITA grew 37.1%, reflecting strong cost reduction efforts and operational improvements.
- EBITA margin increased by 1.1 percentage points to 3.7%, driven by enhanced contract management and disciplined risk-taking.
Operating Cash Flow
- Cash conversion improved to 94%, strengthening the balance sheet.
- Free cash flow surged to $112.5m, a significant improvement from $19.9m in 1H24.
Outlook & Guidance
- The company remains confident in its turnaround strategy, targeting an underlying NPATA of $265m – $280m for FY25.
- EBITA margins are expected to exceed 4.5% in FY26, with a minimum threshold of 4.2% in FY25.
- Strong tender pipeline in 2H25 across Defence, Telecommunications, Power, and Road Maintenance.
- Market conditions remain varied, with lower Australian transport spending and a softer New Zealand economy.
Observations on Market Expectations
The result appears broadly in line with expectations, with stronger-than-expected cost savings and EBITA growth balancing out weaker revenue. The continued turnaround progress and margin expansion could be seen as a positive surprise.
“Disclaimer: This information is provided purely for educational purposes. It takes no account of an individual’s personal financial circumstances and hence can in no way constitute financial advice. The above data may be subject to errors or inconsistencies for which the author takes no liability. It is imperative that all investors do their own research or if they need advice, seek it from a qualified financial adviser.”
Quick Take: H1FY25 ASX:DOW