Half Year 2024 Kelsian Group Ltd Earnings Call Transcript
Key Points
- Revenue grew by 44.9% to $982.7 million, driven by the acquisition of All Aboard America Holdings, Inc. and new Sydney contracts.
- Underlying EBITDA increased by 63.5% to $130.5 million, showcasing the benefits of scale and higher-margin businesses.
- Kelsian Group Ltd (ASX:KLS) successfully transitioned large and complex bus contracts in Sydney, demonstrating operational excellence.
- The company operates the largest zero-emission bus fleet in Australia, positioning itself as a leader in sustainable transport.
- Net operating cash flow increased by 63.3% to $60.3 million, reflecting strong and predictable cash flow generation from contracted revenue.
- Depreciation increased by 117.6% to $55.7 million, due to the acquisition of bus assets and the resetting of the asset base for AAAHI.
- The marine and tourism business faced subdued tourism demand, particularly on K'gari, Fraser Island, due to cost-of-living pressures and poor weather.
- Higher labor costs and KPI penalties impacted the Australian bus business, although these issues are now being resolved.
- Interest expenses rose due to higher levels of borrowings and higher interest rates on unhedged portions of debt.
- The company incurred one-off costs associated with M&A activities and abnormal items, totaling $2.7 million pre-tax.
Thanks, Rachel, and good morning, everyone. Welcome to the half-year results presentation for Kelsian Group Limited for the six months ended December 31, 2023. I'm Clint Feuerherdt, Managing Director and Group CEO; and I'm joined this morning by our Group CFO, Andrew Muir.
This morning, I'll begin by providing an overview of the business as it stands today after a period that represents impressive organic and inorganic growth. I'll outline our financial and operational highlights from the half, and then I'll hand over to Andrew to go through the results in more detail before I return to provide an update on the current focus areas, pipeline of opportunities, and the outlook.
Firstly, turning to slide 3. For those new to Kelsian, I'll give you a quick summary of our diversified businesses, the majority of which have defensive, long-term, government-backed service contracts, resulting in highly predictable, low-risk earnings and cash flows. For those familiar with the business, you will see that we have materially increased our
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