• Revenue up 16.1% to $54.2M, with 52% recurring revenue
• Underlying EBITDA down 13.9% due to one-off cost overrun
• NPAT down 30.5% on one-off Baltec cost overrun
• Expect 10-15% increase in normalised FY25 EBITDA

Environmental Group Ltd (EGL.ASX) has reported its 1H FY25 financial results, with revenue increasing 16.1% to $54.2M, of which 52% was recurring revenue from service and maintenance. However, underlying EBITDA declined 13.9% to $3.9M due to a one-off cost overrun of $1.2M in the Baltec business unit. This cost overrun resulted from design variations that were not correctly updated in the Project Management System. EGL has since completed a full process review and implemented measures to prevent recurrence. Despite the one-off impact, the company expects a 10-15% increase in normalised FY25 EBITDA. The Baltec business saw revenue growth of 84.5% and EBITDA growth of 14.9%, driven by increased demand for gas-generated peaking power. EGL Energy also performed well, with revenue up 34% and EBITDA up 15.1%, benefiting from the Fulton Boiler distribution agreement. EGL Clean Air faced challenging market conditions, with revenue down 45.1% and EBITDA down 54.8%, primarily due to a decline in the lithium sector. EGL Waste & Water made progress, with the PFAS separation technology receiving draft EPA approval and a US patent. The company remains optimistic about its future prospects, with a strong sales pipeline and new opportunities across its business units.

EGL expects a 10-15% increase in normalised FY25 EBITDA.

EGL Baltec is set to have strong performance with a large sales pipeline supporting the transition to increased renewable energy. EGL Air conditions remain difficult in the mining sector, but the company is introducing strategies to grow, with dust extraction showing green shoots on improving market. EGL Waste & Water is expected to have an exciting half with tenders due to be awarded. EGL Energy's Fulton distribution agreement is exceeding expectations in demand, with additional service staff hired to grow recurring revenue. The company's extended product offering is expected to drive growth, with new opportunities in the pipeline. EGL is also implementing an ERP system over the next 12 months to improve efficiency and accuracy.