Skellerup Holdings (NZX:SKL) posts record increase in half-year earnings

Manufacturer and distributor of polymer products for agricultural and industrial applications, Skellerup Holdings Limited (NZX:SKL), announced its half-year results on Thursday.

The Group posted a record increase of 19% on pcp in NPAT to $23.2 million and an increase of 10% on pcp in revenue to $150.5 million for six months ended 31 December 2022.

SKL demonstrated strong impetus in H1 FY22 due to its persistent emphasis on providing vital products to global customers. The Group also declared a 15% rise in its interim dividend of 7.5cps for the full year.

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However, operating cash flow was down in H1 FY22 due to the intended increase in inventory.

CEO David Mair stated that SKL can deliver robust earnings performance consistently because of its ability to design and develop real solutions to majorly original equipment manufacturer (OEM) customers and its focus on their needs.

SKL’s performance across divisions

Skellerup’s agricultural and industrial divisions attained record results from revenue growth with controlled indirect costs and maintaining margins.

The Group’s industrial division revenue saw a growth of 12%, with the US market having the biggest effect because of growth in clean and wastewater products as well as marine foam. SKL also benefitted from the purchase of Tablot Technologies in August.

SKL’s Agri division posted an EBIT of $16.7 million in the period, up 9% on pcp. The division saw a rise of 7% in revenue with increased dairy rubberware sales, majorly in the US and increased footwear sales across all markets, majorly in NZ.

On 17 February, at the time of writing, SKL was trading at $6.29, down 0.16%.

Outlook ahead

SKL expects to post a record profit for FY22 on the back of outstanding results in H1 FY22. The Group expects an NPAT between $44 million to $47 million for FY22.

(NOTE: Currency is reported in NZ Dollar unless stated otherwise)