• FY25 NPAT expected to be broadly in line with FY24
• Challenges in Gemco Rail business unit meeting production targets
• Lower than anticipated bearing sales in June 2025 quarter

Engenco Limited (ASX: EGN) has updated its outlook for the financial year 2025 (FY25). While the company anticipates positive financial performance in the second half, it is no longer expecting an improvement for FY25 compared to FY24. This is primarily due to challenges faced by the Gemco Rail business unit in meeting production targets for the capital wagon program and lower than anticipated bearing sales in the June 2025 quarter. Gemco Rail has a strong pipeline of iron ore wagons being manufactured at Forrestfield for the June 2025 quarter, but due to difficulty in attracting and retaining skilled trades critical to the program, part of the revenue expected in the June 2025 quarter will be deferred to FY26. Additionally, workshop activity in the Drivetrain business is not increasing at the rate anticipated in the second half as some mining operators experience lower activity and have insourced their work. Despite the tempered outlook, the company remains positive about the future, with the establishment of its rollingstock and rotable maintenance facility in Karratha remaining on track, and the manufacture of iron ore wagons commencing in Karratha in the second half of FY26. Drivetrain is also implementing a strategy to broaden its service offering to new industrial segments to increase workshop activity in the future.

The FY25 net profit after tax (NPAT) is now expected to be broadly in line with FY24.

The pipeline remains strong to support growth in FY26. The establishment of the rollingstock and rotable maintenance facility in Karratha remains on track, and the manufacture of iron ore wagons will commence in Karratha in the second half of FY26. Drivetrain is implementing a strategy to broaden its service offering to new industrial segments to increase workshop activity into the future.