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Shares of Kelsian Group (ASX:KLS) have dropped as much as 25.8% to AU$3.720, reaching their lowest point since mid-May 2020. This significant decline marks the largest loss on the benchmark S&P/ASX 200 Index (ASX:XJO) and comes amid concerns over increasing costs.
Higher Depreciation and Interest Expenses
The transport services provider has flagged higher depreciation and interest expenses for FY25, contributing to the recent share price drop. Kelsian Group now anticipates depreciation to rise to AU$117 million (approximately $79.45 million) and interest expenses to AU$59 million, compared to AU$109.2 million and AU$50.4 million, respectively, in FY24. These increased costs are raising concerns among investors about the company's profitability and financial stability in the upcoming fiscal year.
Positive Outlook for FY24 Results
Despite the negative outlook for FY25, Kelsian Group is expecting a strong performance in FY24. The company forecasts a 32.3% increase in underlying net profit after tax and before amortisation, projecting a result of AU$92.6 million. The FY24 results are scheduled for release on Wednesday, which may provide further insight into the company’s financial health.
Year-to-Date Performance
The stock has already fallen 28.4% this year as of the last close, reflecting ongoing investor concerns and broader market challenges. The recent plunge further exacerbates the year's losses and highlights the challenges faced by Kelsian Group in managing rising operational costs.
