This article first appeared on GuruFocus .
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Revenue:$5.4 billion, broadly flat.
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EBITDA:$1.1 billion, increased 1%.
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EBIT:$844 million, increased.
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NPAT:$518 million, increased 2%.
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Operating Cash Flow:$1.1 billion, increased 32%.
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EBIT Margin:15.6%, expanded.
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WesTrac Revenue:$3 billion, contracted 6%.
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Boral Revenue:$1.9 billion, up 7%.
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Boral EBIT:$284 million, increased 10%.
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Coates Revenue:$520 million, contracted 5%.
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Coates EBIT:$142 million, contracted 9%.
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Beach Energy Production:9.5 million boe, down 7%.
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Beach Energy NPAT:$219 million, down 8%.
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Dividend:$0.32 per share, up 7%.
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Leverage:Reduced 4% to 1.91 times.
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Safety Metrics:LTIFR reduced 36% to 0.7; TRIFR reduced 31% to 2.7.
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Release Date: February 10, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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SGH Ltd ( ASX:SGH ) reported strong earnings growth with EBITDA increasing by 1% to $1.1 billion and NPAT rising by 2% to $518 million.
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The company achieved a significant 32% increase in operating cash flow, reaching $1.1 billion, with an impressive EBITDA cash conversion rate of 98%.
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SGH Ltd ( ASX:SGH ) reduced its leverage by 4% to 1.91 times, providing increased balance sheet flexibility.
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The company declared a $0.32 per share interim fully franked dividend, up 7%, aligning with its goal of delivering stable and growing dividends.
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SGH Ltd ( ASX:SGH ) made meaningful operational safety improvements, with LTIFR reducing by 36% and TRIFR by 31%.
Negative Points
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Revenue was broadly flat at $5.4 billion, reflecting the normalization of elevated WesTrac capital sales from the prior period.
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WesTrac's revenue contracted by 6% due to the expected normalization of elevated capital sales.
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Coates experienced a 5% decline in revenue and a 9% drop in EBIT, reflecting the residual impact of the activity decline in the second half of FY25.
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Beach Energy's production and NPAT were down 7% and 8%, respectively, due to the impact of Cooper Basin floods.
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SGH Ltd ( ASX:SGH ) faced a $46 million net reduction in after-tax statutory earnings due to significant pretax items, including impairments and transformation costs.
Q & A Highlights
Q: Can you update us on the first half, second half skew for this year compared to last year? A: Richard Richards, CFO: Historically, the skew has been around 56% in the first half and 44% in the second half. This year, we expect it to be relatively consistent with that pattern.
Q: Any updates on the BlueScope bid and your approach to M&A? A: Ryan Stokes, CEO: If the Board and shareholders don't see value in our proposal, we'll move on to other opportunities. We are comfortable managing leverage due to strong cash flow and focus on industrial businesses with Australian-centric positions.
Q: How do you see customer attitudes towards fleet age and upgrades? A: Ryan Stokes, CEO: Customers focus on production levels and cost structures. Fleet replacements and rebuilds are ongoing, with technology advancements being a key catalyst for future investments.
Q: What are the economic outcomes of different revenue streams within the business, and how did you achieve margin expansion? A: Ryan Stokes, CEO: We anticipated a normalization of capital sales and a step-up in rebuild activity. Our margin range remains at 10-12% EBIT, with operating leverage from rebuild activity and workshop capacity management.
Q: How do you view your land bank at Boral, and would you consider being a part owner of future projects? A: Ryan Stokes, CEO: We prefer owning operational assets. For surplus property, we aim for the highest and best use, potentially partnering for co-development and rental income.
Q: With a strong balance sheet, how do you view shareholder returns versus keeping dry powder for future opportunities? A: Richard Richards, CFO: We prioritize maintaining capacity to invest and grow the business for long-term shareholder value. We are open to capital management initiatives if significant dislocation occurs.
Q: Can you provide an update on maintenance deferral activity and demand recovery in the gold and copper sectors? A: Ryan Stokes, CEO: Maintenance deferral is not fully resolved, but activity is picking up. Resource activity is healthy, with ongoing discussions around fleet orders in gold and lithium sectors.
Q: What is the outlook for construction activity over the next 12 months across infrastructure and residential sectors? A: Richard Richards, CFO: We see strong activity in Queensland and stable demand in New South Wales and Victoria. The construction market is healthy, with infrastructure projects driving demand.
Q: How do you view the opportunity for cost reduction at Boral as you approach mid-teens margin targets? A: Ryan Stokes, CEO: The focus is on cost variabilization to match demand with capacity. We aim for margin expansion through efficiency and alignment of costs with activity levels.
Q: Is the $29 adjusted bid price for BlueScope final, and how far above the target leverage would you be comfortable going for an acquisition? A: Ryan Stokes, CEO: We believe the offer is full and fair. We are comfortable going beyond 2.5 times leverage for the right acquisition, with a clear plan to reduce it back to target levels.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
