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ALS (ASX:ALS) - Managing Director & CEO, Raj Naran (left)
Managing Director & CEO, Raj Naran (left)
Source: Nuvisan
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  • ALS (ALQ) has boosts its half-year dividends following a strong start to the 2022 financial year
  • The company will issue an interim dividend of 15.8 cents per share, representing an 85.9 increase compared to last year’s distribution
  • It follows a 22.9 per cent jump in revenue to $1.03 billion and a 57.7 per cent jump in underlying NPAT to $127.1 million
  • The results were driven by a strong performance in its Life Sciences and Commodities divisions, which enjoyed a 19 per cent and 37.7 per cent increase in revenue, respectively
  • Shares in ALS are up 1.03 per cent to $13.75 as of 11:50 am AEDT

ALS (ALQ) has boosted its half-year dividends following a strong start to the 2022 financial year.

The global testing, inspection and certification business will issue an interim dividend of 15.8 cents per share, representing an 85.9 per cent increase compared to the first half of 2021.

In a statement this morning, ALS said the distribution “reflects the strong first half performance and liquidity position,” which saw revenue for the period jump 22.9 per cent to $1.03 billion.

Underlying net profit after tax (NPAT) also soared 57.7 per cent to $127.1 million, beating an earlier forecast of between $115 million and $125 million.

ALS said the strong results were driven by its Life Sciences and Commodities divisions, which enjoyed a 19 per cent and 37.7 per cent increase in revenue, respectively.

“All three Life Sciences businesses delivered double-digit organic growth as volumes surpassed pre-pandemic levels,” Managing Director and CEO Raj Naran said.

“The Commodities division continues to benefit from the strong commodity cycle, with Geochemistry in particular seeing strong sample volume growth from both major and junior mining clients as it capitalises on its market leading position.”

Underlying earnings in the company’s Life Sciences division mirrored the jump in revenue, notching a 28.5 per cent increase to $95.1 million. ALS said this was driven by volume growth, process automation and efficiency gains, as well as cuts to capital expenditures in response to COVID-19.

The acquisition of a 49 per cent stake in Germany-based Nuvisan in early October, which ALS said will expand the service offerings and geographical reach of its pharmaceuticals segment, is now expected to make a full contribution in the second half of FY22.

In its Commodities division, ALS reported a 29.9 per cent increase in underlying earnings, thanks in part to a 46 per cent jump in geochemistry sample volumes. Roughly 70 per cent of the volume came from major miners, while the remaining 30 per cent came from juniors.

Notably, ALS said there is currently an investment to bolster geochemistry capacity by 15 per cent, which is expected to be finalised by the end of FY22.

The company’s Industrial division offset some of the success brought on by Life Sciences and Commodities, with a 1.5 per cent drop in revenue and a 16.3 per cent drop in underlying earnings.

ALS said the decline in performance was due to ongoing state border closures in Australia, the closure of its Asset Care business in the United States, and temporary labour shortages.

Still, the company had roughly $720 million of available liquidity as of September 30, and said it would continue its strategy based on “value enhancing acquisitions, particularly in the food and pharmaceutical markets.”

“This is a very pleasing performance which demonstrates that the group is capturing organic and inorganic growth opportunities as the global economy continues to recover,” Chairman Bruce Phillips said.

“ALS has emerged as a stronger company from the early stages of the COVID-19 pandemic and we remain well-positioned to capitalise on the long-term megatrends driving structural growth across the testing, inspection and certification industry.”

Over the rest of FY22, ALS is targeting underlying NPAT of between $242 million and $252 million, which — based on the midpoint of that range — would represent a 33 per cent increase over FY21.

ALS said its Life Sciences and Commodities divisions will likely continue their strong performance into the second half but may be impacted by an increase in capital expenditure. Its Industrial division, however, will remain challenged as border closures prevail.

Shares in ALS are up 1.03 per cent to $13.75 as of 11:50 am AEDT.

ALQ by the numbers
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