Continuing-ops PBT up 33.9% as net debt/EBITDA steps to 5.05x

Reported revenue of $1.1b is 3.3% lower than the prior $1.1b, but the prior figure still carried Gas Trading contributions. On the continuing-operations basis management discloses, adjusted EBITDA was $401.1m, profit before tax was $241.2m (+33.9%), and continuing-operations NPAT reached $154.7m versus $79.9m, even after absorbing a $37m impairment of the gas distribution network. Total NPAT including discontinued operations was $166.5m.

Capital expenditure eased 7.8% to $470.1m and operating cash flow of $515.2m more than covered it, producing free cash flow of $292.6m after debt finance. However, gross borrowings of $2b and net debt of $2b lifted net debt/EBITDA from 3.75x to 5.05x. The declared final dividend is 13.0 cents, taking full-year dividends to 25.0 cents (prior: 24.0 cents).

• The release frames continuing operations as revenue +9% and adjusted EBITDA +16%, while statutory totals show revenue down 3.3% and reported EBITDA at $401.1m versus $523.5m. Investors should anchor to the continuing-operations base because the prior period included Gas Trading; treating the move as a clean like-for-like decline misrepresents the underlying network business.
• Leverage stepped up to 5.05x net debt/EBITDA. Net debt rose to $2b while the EBITDA denominator is now narrower without Gas Trading. For a regulated network business the absolute leverage is high relative to the prior 3.75x reading, and it tightens the buffer for funding the next capex cycle without further debt or equity capacity from divestment proceeds.
• Continuing-operations earnings are improving even after a $37m impairment. Continuing-operations NPAT nearly doubled to $154.7m and PBT grew 33.9% to $241.2m despite the gas-network write-down. This says the core electricity-distribution business and lower capex intensity are doing real economic work, but the network impairment also signals that regulatory or asset-value pressure on gas remains live.

The available context is the HY25 interim, which showed revenue from continuing operations of $560.5m and continuing-operations NPAT of $118.1m, implying a second-half NPAT contribution of roughly $36.6m on the continuing basis — materially softer than the first half once the $37m gas impairment lands. The release describes capex as down 6% with a full-year dividend of 25 cents per share, but does not quantify FY26 EBITDA, dividend, or leverage intent. Investors are therefore left to judge sustainability from current cash conversion and the 5.05x leverage starting point rather than any management-supplied trajectory.

Receivable days improved from 29.3 to 23.0, supporting the cash outcome rather than distorting it. Capex intensity also eased, with capex falling 7.8% to $470.1m on a slightly smaller revenue base.

Against that, three quality caveats matter. First, NPAT growth of 87.9% overstates underlying performance because the effective tax rate dropped from 55.6% to 35.9%; PBT growth of 33.9% is the cleaner operating read. Second, the company-disclosed payout ratio is 85% of free cash flow, but the 25.0-cent full-year dividend equates to 149.7% of statutory NPAT, so dividend coverage rests on FCF and the divestment cash profile rather than on accounting earnings. Third, the $37m gas-network impairment, while non-cash, is the second consecutive year of impairment in that asset base (FY24 carried a $60m charge), so the carrying value is still being progressively tested.

This briefing cannot assess management's forward EBITDA trajectory, capex plan, or capital-structure intentions because no quantified FY26 targets were disclosed in the supplied material.