EBITDAF rose 11.6% but operating cash fell 29.1% on inventory build

The gap between earnings growth and cash collection is the dominant feature of this result.

Below EBITDAF, PBT grew 19.3% to $227.9m and NPAT grew 29.0% to $169.1m. The wider NPAT growth reflects a lower effective tax rate (25.8% versus 31.4%) rather than incremental operating performance, so PBT is the cleaner operating read.

The balance sheet absorbed cash. Inventories climbed from $87.5m to $230.5m (+$143.0m), cash on hand fell 58.0% to $81.0m, and net debt rose to $1.4b from $1.3b. Total dividends per share were 14.3 cents versus 14.0 cents.

Operating cash flow / EBITDAF fell to 68.6% from 108.0%, driven by a $123.7m absorption into operating working capital and a 12.5-day rise in inventory days. For a gentailer this typically reflects fuel and stored-energy positioning, but it materially reduces the cash backing the earnings line and elevates net debt despite higher reported profit.

Headline NPAT growth is tax-flattered. PBT grew 19.3% while NPAT grew 29.0%, a 9.7 percentage-point gap explained by the effective tax rate dropping from 31.4% to 25.8%. Investors framing the result on +29% NPAT are overstating the underlying step-up; the +19.3% PBT figure is the cleaner read on operating progression.

Gross-margin and segment mix weakened. Group gross margin slipped 170 basis points to 23.6%, with the Gas segment compressing from 23.3% to 17.1% even as Gas revenue grew. Electricity gross margin softened modestly (21.1% to 20.6%) on higher revenue, so the EBITDAF gain leans on volume and mix rather than unit economics improving.

The supplied interim shape indicates a second-half weighting: HY25 contributed 47.7% of full-year EBITDAF and only 41.6% of full-year NPAT, so the H2 step-up is consistent with the company's recent shape rather than a clean run-rate.

Annualising HY25 revenue gives $3.5b versus the $3.7b delivered, confirming H2 carried the result. The release does not provide enough context to judge whether the inventory position represents pre-funded fuel for a forward winter or a structural working-capital re-set, which is the central forward question this result leaves open.

The reported EBITDAF gain is real but partially supported by a 20.2% revenue uplift against a 170-basis-point gross-margin contraction, indicating the growth is volume-led rather than margin-led. NPAT is additionally flattered by the lower effective tax rate, and roughly $123.7m of the EBITDAF was retained on the balance sheet as working capital rather than converting to cash. FCF / NPAT of 86.9% sounds reasonable in isolation but follows a prior year where OCF exceeded EBITDAF — the underlying conversion direction is unfavourable.

Payout ratio versus pre-lease FCF is suppressed because the source-backed cash-dividend bridge is unavailable.

This briefing cannot assess hydrology, hedge-book positioning, or forward fuel-cost assumptions because none of those drivers are disclosed in the supplied release context.