• Earnings in line with expectation despite 7% lower volume and inflationary pressures
• Residential demand soft but steady, expected recovery in second half 2025
• Industrial demand has softened, but marine and cladding remain solid

Capral Ltd, Australia's leading supplier of aluminium extrusion and rolled products, has reported its half-year results. The company's earnings were in line with expectations, despite a 7% drop in volume. This was due to higher metal (LME) prices, which lifted sales revenue above the prior period. Industrial demand has softened, particularly in the transport, infrastructure, and manufacturing sectors, but the marine and cladding sectors remain solid. Residential demand has been soft but steady, and is expected to recover in the second half of 2025. The company has maintained margins through effective cost management and recovery. Capral's balance sheet remains strong, with a net cash position and well within bank covenants, providing flexibility to manage uncertainty and capital allocation. The company continues to focus on increasing return on invested capital, improving its competitive position, and growing its presence in aluminium distribution. Key strategic initiatives include process improvement programs, upgrading manufacturing and distribution capabilities, and investing in technology and new product development. Capral is also actively participating in government forums on anti-dumping measures to ensure a level playing field. The company's ESG framework is guiding its path to a more sustainable future, with commitments to increase the circularity of aluminium, achieve net zero emissions by 2050, and align with global reporting standards.

FY25 EBITDA is expected to be broadly in line with the prior year, based on a forecast improvement in market conditions and absent unforeseen events. Capital expenditure is planned at $11 million. Capral would be in a position to continue returns to shareholders, firstly in the form of on-market share buy-backs and topped up by unfranked dividends if required.

The residential building sector is forecast to start recovering in the second half of 2025, with total commencements expected to increase by 8% on 2024. The LME price is volatile and subject to global factors, but is expected to remain at elevated levels during the remainder of 2025. Inflationary cost pressures continue to impact the business, especially in areas such as employee, energy, packaging, and freight costs. Working capital levels are expected to remain elevated due to higher metal costs.