Downgrade to HOLD with a 30% lower Civmec's target price of S$0.98. Civmec expects softness in the near term as project approvals have slowed down ahead of the Australian election. However, tendering activities remain strong and medium-term indications are positive.
- Read this at SGinvestors.io -
1HFY25 revenue in line but earnings missed.
Civmec (SGX:P9D) recorded 1HFY25 revenue of A$503m (+2% y-o-y), which is in line with expectations but earnings of A$27m (-17% y-o-y) missed our forecast, forming 40% of our full-year estimate due to weaker-than-expected net margin, which fell 1.2ppt y-o-y to 5.3%.
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Maintaining interim dividend is a show of confidence.
Despite the weaker earnings, Civmec maintained its 1HFY25 interim dividend of 2.5 Australian cents, indicating confidence in its balance sheet strength and business outlook. This translates into a payout ratio of 48%. See Civmec's dividend payout date.
In addition, Civmec is optimistic about maintaining its full-year dividend at around 6.0 Australian cents for FY25, barring unforeseen circumstances.
Outlook appears balanced
Read more at SGinvestors.io.
Above is an excerpt from a report by UOB Kay Hian Research. Clients of UOB Kay Hian may be the first to access the full PDF report @ https://www.utrade.com.sg/.
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