• Automotive Leather profits flat, impacted by delayed launches and supply chain issues
• Delta profits strong in 1H25, but expected to decline in 2H25
• Group Investments contribute higher profits due to unrealized gains

Schaffer Corporation Limited (ASX: SFC) reported first half statutory net profit after tax (NPAT) of $12.7 million, up 44% from $8.8 million in the prior corresponding period. The results reflect a strong performance from the Delta division and similar profits for Automotive Leather versus the comparative period. The Board has declared an interim fully franked dividend of $0.45 per share, matching last year's interim and final dividend. Automotive Leather generated profits of $7.8 million, flat compared to the prior year, impacted by delayed launches of certain new programs and supply chain issues. Delta reported a strong 1H25 profit of $4.2 million, up from $2.2 million, benefiting from the government's continued investment in large-scale infrastructure projects in Western Australia. However, going forward, Delta's profits are expected to be considerably lower as many of these large-scale projects have been completed, leading to excess industry capacity. Group Investments contributed NPAT of $2.3 million, up from $0.5 million, mainly due to net unrealized gains on equity investments. The pre-tax net equity value of the Group's investments was $219.9 million or $16.18 per share at 31 December 2024, up from $210.9 million or $15.53 per share at 30 June 2024.

Subject to the risks outlined, Automotive Leather profits for 2H25 should be higher than 1H25 as new programs launch and operational efficiencies improve. Delta profits are expected to be closer to break-even for 2H25 based on the current order book and market conditions.

The current global economic environment shows signs of slowing with many other potential risks which could impact the businesses. The company remains cautious but continues to see opportunity for Automotive Leather during the second half of the 2025 financial year.