Downer EDI Shares Soar 15% on Strong Financial Turnaround and Dividend Announcement

August 30, 2024 02:57 PM AEST | By Team Kalkine Media

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Downer EDI Shares Soar 15% on Strong Financial Turnaround and Dividend Announcement — Image source: Johnstocker Production, Shutterstock

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Shares of Downer EDI Ltd (ASX:DOW) surged as much as 15.3% on Friday, reaching AU$5.51, their highest level since August 2022. The significant rise in share price marks the company as the top gainer on the ASX 200 benchmark index, reflecting strong investor confidence following a robust financial recovery.

Major Turnaround to Profitability

Downer EDI reported a substantial swing to profitability for the full year, posting a statutory profit after tax of AU$82.1 million (approximately $55.79 million). This marks a significant recovery from the prior year’s loss of AU$385.7 million, underscoring the company's successful turnaround efforts.

Impressive EBITDA and NPAT Growth

The company also delivered strong growth in key financial metrics for FY24. Pro-forma EBITDA increased by 34.1%, showcasing the company's improved operational performance. Additionally, Downer EDI achieved a 24.5% rise in underlying net profit after tax (NPAT), further solidifying its financial strength.

Dividend Declaration Reflects Positive Outlook

In a move that highlights its confidence in future earnings, Downer EDI declared a final dividend of 11 Australian cents per share. This payout is likely to be welcomed by shareholders, particularly following the company's return to profitability.

Stock Performance and Market Reaction

The sharp rise in Downer EDI’s share price reflects the market's positive response to the company’s financial turnaround and solid performance metrics. This rally has pushed the stock to levels not seen in over a year, reinforcing its strong position within the ASX 200.

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