Midway (MWY) H2 2024 earnings summary

Executive summary

• Achieved first NPAT profit since FY 2019, with underlying EBITDA rising to AUD 14.2 million, positive operating cashflow of AUD 22.8 million, and dividend resumption after several challenging years.

• Strategic review since 2022 led to asset sales, operational improvements, and a focus on carbon growth, resulting in a stronger balance sheet and enhanced business performance.

• Strong balance sheet supported by plantation estate sales, with AUD 156.3 million sold to MEAG and AUD 35.1 million due to settle soon.

• Major progress in carbon management, asset optimization, and market positioning, with new partnerships and infrastructure developments; carbon business established, managing 10,127 hectares and leading in plantation carbon projects.

• Geelong and Tasmanian operations improved, with infrastructure completed and new supply agreements secured.

Financial highlights

• Underlying EBITDA improved by AUD 11.3 million to AUD 14.2 million year-over-year; statutory EBITDA at AUD 12.3 million, up from AUD 6.5 million.

• Sales revenue increased to AUD 273.5 million from AUD 187.8 million year-over-year; total revenue and other income reached AUD 279.6 million.

• Positive operating cashflow of AUD 22.8 million, driven by inventory reduction and asset sales.

• All short and long-term debt repaid by June 2024; strategy liability reduced from AUD 43.2 million in 2020 to AUD 8.2 million, to be fully repaid after final estate sale tranche.

• Special fully franked dividend of AUD 0.145 per share and ordinary dividend of AUD 0.016 per share declared.

Outlook and guidance

• Expectation of AUD 10–15 million underlying EBITDA through the cycle, with growth anticipated from the carbon business over the next five years.

• Carbon business earnings to become meaningful in 2–4 years as project pipeline matures; carbon market expected to tighten from 2026, with rising ACCU demand and prices.

• Grain project to contribute revenue from 2H25; land sale of 5.15 hectares for AUD 15.5 million to settle in Q2 FY25.

• Cautious optimism for wood fiber demand, with ongoing market volatility and a focus on operational improvements.

• Final tranche of plantation estate sale to settle in September 2024, supporting dividend payments.