United Malt’s (ASX:UMG) 1H profit falls despite 11% revenue boost

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United Malt’s (ASX:UMG) 1H profit falls despite 11% revenue boost

United Malt’s (ASX:UMG) 1H profit falls despite 11% revenue boost
Image source: © Wutzkoh | Megapixl.com

Highlights

  • United Malt reported a fall in net profit for the half year ending 31 March 2022.

  • The company’s board declared an unfranked interim dividend of 1.5 cents per share.

  • United Malt’s revenue rose 11%.

United Malt Group Ltd (ASX:UMG) on Tuesday reported a fall in net profit for the half year ending 31 March 2022, while its revenue rose on increased customer demand in each of its domestic markets and higher barley price.

The world’s fourth biggest maltster, United Malt produces ingredients for the brewing, distilling and food markets.

The company’s board declared an unfranked interim dividend of 1.5 cents per share, down 25% from 2 cents announced in 1H21. “The record date for determining entitlements to the interim dividend is 2 June 2022, with scheduled payment on 17 June 2022,” United Malt said in its latest ASX filing.

United Malt’s revenue rose 11% to AU$652 million. However, this was offset by external factors, mainly impacting the company’s processing segment, including the Canadian drought affecting barley quality, supply chain disruptions, and the timing of recovery from customers of input cost inflation.

United Malt’s net profit after tax (NPAT) came in at AU$10 million compared to AU$14 million for 1H21. The Group’s underlying earnings before interest, tax, depreciation and amortisation (EBITDA) stood at AU$57 million (before software as a service costs) for the period under review. EBITDA was in line with recent guidance, but down 5% on the prior corresponding period.

By 10:10 AM (AEST), United Malt’s stock was trading at AU$3.98, down 1%.  The stock has fallen nearly 12% on a year-to-date (YTD) basis.

Financial position & outlook

United Malt’s net debt for the period was AU$427 million compared to AU$312 million as of 30 September 2021.

“Customer demand is returning as most of our markets reopen and COVID-19 restrictions are lifted. We are seeing sales volumes continue to recover and we are expecting full year sales volumes to exceed FY21 levels and approach pre-COVID (FY19) levels,” said United Malt’s Managing Director and CEO, Mark Palmquist.

“Beer remains a significant and growing beverage category while demand for craft beer and ancillary products continues to accelerate. Demand for distilling continues to grow with United Malt’s customers laying down spirits for 10+ years for aged whisky,” he added.

Meanwhile, United Malt confirmed its previous earnings guidance for FY22, with underlying EBITDA likely to be in the range of AU$115-140 million (before SaaS costs).

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