InfraBuild announces Q1 FY23 results and intended strategic acquisitions
November 17, 2022
InfraBuild today announces strong financial and operational results for the first quarter of the 2023 Financial Year, and its intention to undertake strategic US acquisitions to position the business for future growth.
Q1 FY23 result highlights
InfraBuild’s strong financial performance has continued through the first quarter of FY23.
Comparison made with Q1 FY22 results:
- Net revenue – A$1,529 million (up 2%)
- EBITDA – A$197 million (up 24%)
- Safety (TRIFR) – 5.3 (31% improvement, down from 7.7)
- ROIC % (LTM) – 27.7%
InfraBuild’s group revenue for FY22 was up 32% to A$6 billion, with EBITDA up 92% as the business benefited from strong market conditions.
Following the repayment of its ABL in September, InfraBuild intends to raise new finance to support the ongoing liquidity of the business and fund the acquisitions of:
- Keystone Consolidated Industries (KCI)*, comprising an Electric Arc Furnace (EAF), rolling mill and wire mill at Steel and Wire (Peoria), mesh manufacturing sites from Engineered Wire Products (Ohio and New Mexico)
- Johnstown Wire Technologies (Pennsylvania and Ohio)
- Georgetown steelworks (South Carolina)
Under the potential acquisition, InfraBuild would acquire the businesses from its parent company, GFG Alliance, to create a vertically integrated EAF long steel producer with leading market positions in Australia and the United States, providing strong synergies across its product portfolio.
As well as enhancing its balance sheet and financial flexibility, InfraBuild would benefit from revenue diversification, exposure to a US infrastructure market buoyed by the $1.2T Infrastructure Investment and Jobs Act, and a shared mission for low carbon steel production through the recycling of scrap metals.
The US units would benefit from the mature governance and operational structures of InfraBuild and would be well-positioned to achieve long-term capital and operating efficiencies.
The intended acquisitions build on InfraBuild’s integration of international recycling facilities in La Place and Tampa in the United States over FY22. The intended acquisitions are expected to be consolidated into the Group through H2FY23, subject to diligence and financing structure.
InfraBuild’s Interim CEO Dak Patel said:
“On the back of a record performance in FY22 and the positive trend continuing into FY23, InfraBuild’s management team is working hard to maintain momentum and its strong operating cadence with a focus on workplace safety and wellbeing, operating productivity and working capital invested.
“With our intended acquisitions in the US wire and bar market we will be building on our core competencies, expanding our existing US operations, diversifying our revenue streams and gaining exposure to the growing US infrastructure market.
“These acquisitions are the right long-term fit for InfraBuild and would combine two businesses with a shared mission for sustainable steel production and strong market positions in the Australia and the USA.”
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