AoFrio swings to $0.6m profit on 49.2% revenue rebound as net cash builds

Revenue rose 49.2% to $30.6m, EBITDA improved 61.1% to $1.8m, and the group reported PBT of $0.6m and NPAT of $0.6m, against losses of $0.8m at both lines in HY20 — growth of 180.2% and 177.6% respectively.

Operating cash flow lifted to $3.1m from $0.7m, well ahead of EBITDA growth, while cash on hand doubled to $6.1m. Gross borrowings fell 40.7% to $2.1m, leaving the group in a $4.0m net cash position versus broadly neutral net debt a year ago.

Both segments contributed. Motors revenue grew to $17.8m (58.3% of group) and IoT revenue grew to $12.8m, with IoT segment result almost tripling to $2.8m.

HY20 revenue had fallen 38.5% on prior-period quoted commentary, and FY20 revenue ($36.9m) was well down on $61.7m in 2019. The 49.2% rebound does not yet restore pre-pandemic volumes — annualising HY21 implies $61.1m, broadly back to 2019 levels but only just. This matters because the headline growth rate flatters what is essentially a normalisation, not a step-change.

Net cash position rebuilt. Cash rose $3.1m and borrowings fell $1.4m, swinging net debt to -$4.0m (net cash) from $0.5m. With ROE moving to 3.9% from -6.4%, the balance sheet is now visibly stronger heading into the second half, which is the leverage backdrop investors have been waiting on through the COVID period.

IoT is doing the operating heavy lifting on margin. IoT segment gross margin of 44.6% on $12.8m revenue produced a $2.8m result, materially ahead of Motors' $1.8m result on $17.8m at 17.8% margin. Mix shift toward IoT (41.7% of revenue, up 2.7pp) is the lever that matters for group margin trajectory if it persists.

Shape context is limited because HY20 itself was COVID-disrupted: it captured 95.5% of FY20 EBITDA and 55.5% of FY20 revenue, with the second half of 2020 effectively flat at the EBITDA line and loss-making at NPAT. That makes the FY20 split an unreliable seasonality guide.

What the release supports is that AoFrio entered the second half with materially more cash, lower borrowings and a recovering customer demand profile. What it does not support is any view on whether H2-21 can sustain the H1 run-rate, because no forward-work figure or guidance has been disclosed.

First, cash conversion of 170.6% (OCF/EBITDA) is well above the prior 63.6%, helped by a release of inventory days (28.4 from 42.9) even as trade debtors rose $4.5m in line with revenue growth (receivable days roughly stable at 83.1). The cash generation is therefore demand-led, not purely working-capital-driven, but inventory normalisation is a one-time tailwind that will not repeat.

Second, capex collapsed to $0.05m from $1.77m, with the prior-period spend dominated by $1.7m of intangible asset payments. This drove free cash flow pre-lease to $3.1m from -$1.0m and a 503.3% FCF/NPAT ratio. The release does not explain whether the intangible-capex pause is a deliberate phasing of capitalised development or a deferral, but FCF at this level is unlikely to be a durable run-rate if intangible investment resumes at HY20 intensity. PBT growth of 180.2% sits very close to NPAT growth of 177.6% (2.6pp gap), and the current effective tax rate of 1.1% is low, so there is no tax distortion to strip out — but it also means future periods will likely carry a higher tax drag.

This briefing cannot assess customer concentration, contracted forward revenue, or whether the H1-21 demand pace has continued into the third quarter, because none of those data points were disclosed in the supplied release.