Skip to main content

1H24 result at a glance

ING reported a 1H24 underlying NPAT modestly lower than expectations at $63.4m (BPe $65.5m) driven largely by a higher tax rate. Key operating statistics:

Operating results: Revenue of $1,642m was up +9% YOY (vs. BPe $1,606m). Underlying post-ASSB16 EBITDA of $252.1m was up +20% YOY (vs. BPe of $247.4m). On a pre-AASB16 basis, underlying EBITDAL was up +66% YOY to $138.4m (vs. BPe of $137.9m and guidance of ~$138m). Underlying NPATL of $69.3m was up +46% YOY (vs. BPe of $71.2m and guidance of ~$71m).

Cashflow and balance sheet: Lease adjusted operating cashflow of $74.8m compares to a -$9.8m outflow in 1H23. Ex-factoring an operating cashflow of $74.2m was reported and compared to a -$21.4m outflow in 1H23. Net debt (adjusted for factoring) exited at $478.7m compared to $394.7m at FY23 and $447.3m at 1H23 and incorporates $82.2m of acquisition funding.

Outlook: There is no formal FY24e earnings guidance. Outlook comments include: (1) earnings in 2H24 are expected to be below 1H24 levels given seasonality. This is unchanged from previous guidance; (2) Feed costs stabilised in 1H24 and anticipated to be of some benefit in FY25e; (3) Consumers are shifting to in-home dining, resulting in a channel shift to retail; and (3) S,G&A costs to be higher than FY23.

Following the result, we have downgraded EBITDAL by -3% in FY24e, -2% in FY25e and -2% in FY26e. NPATL is downgraded by -12% in FY24e, -12% in FY25e and -12% in FY26e and includes removal of expected R&D tax offsets. Our target price is now $4.35ps (prev. $4.90ps).

Investment view: Buy rating unchanged

We recently upgraded ING on a view that it is a second derivative exposure to improved winter cropping prospects with weaker feed cost drivers already becoming visible for FY25e. While the reaction to today’s outlook statement (which is essentially unchanged relative to Oct’23) was aggressive, the overall dynamic that we saw emerging remains unchanged.

To read the full report click the button below.

View Detailed Report
Authored by Jonathan Snape – Analyst – at Bell Potter Securities, 16 February 2024
Important Disclaimer—This may affect your legal rights: Because this document has been prepared without consideration of any specific client’s financial situation, particular needs and investment objectives, a Bell Potter Securities Limited investment adviser (or the financial services licensee, or the proper authority of such licensee, who has provided you with this report by arrangement with Bell Potter Securities Limited) should be consulted before any investment decision is made. While this document is based on the information from sources which are considered reliable, Bell Potter Securities Limited, its directors, employees and consultants do not represent, warrant or guarantee, expressly or impliedly, that the information contained in this document is complete or accurate. Nor does Bell Potter Securities Limited accept any responsibility to inform you of any matter that subsequently comes to its notice, which may affect any of the information contained in this document. This document is a private communication to clients and is not intended for public circulation or for the use of any third party, without the prior approval of Bell Potter Securities Limited. In the USA and the UK this research is only for institutional investors. It is not for release, publication or distribution in whole or in part to any persons in the two specified countries. This is general investment advice only and does not constitute advice to any person.
Disclosure of Interest: Bell Potter Securities Limited receives commission from dealing in securities and its authorised representatives, or introducers of business, may directly share in this commission. Bell Potter Securities and its associates may hold shares in the companies recommended.