Perenti share price jumps following ‘strong finish to FY22’ and guidance for FY23

The Perenti Global Ltd (ASX: PRN) share price has closed higher on Tuesday after the company released its full-year FY22 results.

The Perenti share price opened slightly lower at 69.5 cents and finished the day at 71.5 cents, up 2.14%.

Perenti is a diversified global miner and mining services group headquartered in Perth, Western Australia.

Investors bidding up Perenti share price on ‘strong results’

The key metrics in the FY22 report are as follows:

• Underlying EBIT(A) exceeded the top end of the revised FY22 guidance range at $176.3 million, with 2H FY22 EBIT(A) 18% above 1H FY22
• Record underlying revenue in line with expectations at $2,438 million, up 21% on the prior corresponding period (pcp)
• Underlying EBITDA of $426.4 million, up 12% pcp
• Underlying NPAT(A) of $81.7 million, up 6% pcp
• Leverage of 1.3 times, outperforming expectations of an increase to approximately 1.5 times from 1.3 times pcp.

What else happened in FY22?

Perenti said it had “delivered strong FY22 financial and operational results, headlined by a significant step-up in 2H22 earnings, and continued improvement in leverage”.

Highlights in FY22 included divesting several non-core assets to free up $134.7 million of cash.

The miner also commenced an on-market share buyback program on 23 June. It intends to buy back up to 10% of the shares on issue.

It refinanced an existing $400 million revolving credit facility (RCF) to a $420 million syndicated debt facility. This was supported by an improved credit rating in FY22 from BB to BB+.

What did management say?

Managing director and CEO of Perenti Mark Norwell said:

Our strategic focus on maximising cashflow generation from our activities, effectively managing capital and driving operational performance, combined with the professionalism, dedication and resilience of our people, has enabled Perenti to deliver solid financial results for FY22, with a strong second half.

We have continued to re-shape our business and are positioned to create a blended portfolio of complementary services through three operating divisions.

This portfolio will be underpinned by our Contract Mining division, which remains our core business and is the source of our major growth projects with globally recognised and respected brands.

Combined with a streamlined corporate centre, Perenti is positioned to deliver a step-up in cash backed profits in FY23, with further improvements expected to drive earnings growth through to FY25 and beyond.

What’s next?

Perenti recently announced a 2025 strategy update. This included “a greater focus on total shareholder returns through improved project performance, disciplined capital management and a refined business and operating model”.

In FY23, Perenti said it “expects to generate meaningful returns on the capital invested within the latter stages of FY21 and throughout FY22”.

The company issued FY23 guidance of $2.4 billion to $2.5 billion in revenue. It also expects a 5% to 16% year-over-year increase in EBIT(A) to between $185 million and $205 million.

It also projects net capital expenditure of approximately $330 million in FY23, and leverage of approximately 1.2 times.

Perenti share price snapshot

The miner’s shares are down 22% year to date and 16% lower over the past 12 months.

The post Perenti share price jumps following ‘strong finish to FY22’ and guidance for FY23 appeared first on The Motley Fool Australia.

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Motley Fool contributor Bronwyn Allen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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