As dj-seen again with Capral update

For the second consecutive year Capral Aluminum (ASX:CAA) released a belated update to its earnings outlook for the year to Dec. 31.

In December 2021, the company raised its earnings forecast with just weeks to go and yesterday it raised its 2022 forecast in the same way.

“Market conditions in the second half of the year remained firmer than expected, leading to improved earnings,” Capral said in a statement to the ASX.

“Following the guidance provided with our half-year earnings release on August 18, 2022, Capral is pleased to announce an update to its FY22 earnings guidance.

“Capral expects Underlying EBITDA and Underlying EBIT to increase by approximately $5 million, in the middle of our previous guidance range, to approximately $60 million and $40 million. respectively.”

In 2021, the company reported EBITDA of $59.2 million, so the upgrade should allow the company to avoid reporting lower operating income. But after-tax profit will be down about 25% from the $42.7 million reported for 2021.

“Net profit after tax (excluding tax benefit) will be approximately $31 million (in 2022), impacted by a negative LME revaluation of $3 million in the second half (EX21: $3 million positive revaluation).

“On this basis, Capral would be able to pursue the payment of a fully franked final dividend,” the directors said echoing the wording of the 2021 statement.

Capral paid a fully franked final dividend of 50 cents per share for 2021 and a total of 70 cents.

Capral paid an interim dividend for 2022 of 20 cents per share after reporting record half-year after-tax profit of $22.3 million, including a deferred tax benefit of $3.5 million. Underlying EBITDA increased to $31.6 million.

Directors said the interim result saw “solid volume and an improving sales mix and margin combined to drive profitability to record levels. Housing starts have started to decline but a backlog of Very high orders at the start of the year supported volume. A high level of capacity utilization in our extrusion plants, combined with the benefits of the operational restructuring of 2019, contributed to the profit result.”

Investors appreciated the news of the upgrade and the final dividend and sent shares up 4.7% to $7.80.

Glenn Dyer

Glenn Dyer has been a financial journalist and television producer for over 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.