The NRW Holdings Limited (ASX: NWH) share price is soaring after the company released its half-year results for the FY22 period before the market open.
At the time of writing, the diversified service provider's shares are fetching $1.98 apiece, up 14.9%.
Let's take a closer look at NRW's performance in the first half.
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NRW share price advances following growth across key metrics
The NRW share price is well into the green on the back of the company's robust results for the six months ending 31 December 2021. Here are some of the key highlights:
- Revenue of $1,160 million, down 0.7% on the prior corresponding period (pcp) (H1 FY21 $1,168 million)
- Earnings before interest and tax (EBIT) of $74.6 million, up 26.4% (H1 FY21 $59 million)
- Profit before income tax of $64.2 million, up 59.3% (H1 FY21 $40.3 million)
- Cash balance of $195.9 million, up 33.7% on the prior period ($146.5 million)
- Fully franked interim dividend of 5.5 cents per share, up 37.5% (H1 FY21 4 cents per share).
What happened in H1 FY22 for NRW?
Investors are bidding up the NRW share price today as the company announced upgraded earnings for the FY22 period.
NRW is comprised of three divisions, which are civil, mining, and minerals, energy and technologies (MET).
In the civil business, revenue was lower than the pcp as major Pilbara-based projects were completed in FY21.
NRW noted that the high activity level in FY21 meant they had to hire more staff at unprecedented levels. Projects cost more because staff availability was severely impacted by COVID-19 measures including border closures.
Lower activity in the first half of FY22 meant not as many staff were needed, which in turn has contributed to improved margins.
Across to the mining segment, activity levels increased by around 10% excluding the impact of lower revenue (and depreciation) on the Boggabri project.
Revenue increased to $611.3 million from $585.4 million in H1 FY21.
Lastly, revenue in the minerals, energy and technologies business increased to $359.2 million compared to $118.3 million in H1 FY21. This was mostly due to the inclusion of Primero, which was acquired by NRW in February 2021.
Over the six months to 31 December, the NRW share price rose by 20.4%.
What did NRW management say?
NRW managing director and CEO, Jules Pemberton, touched on the result, saying:
The results reflect what we said we would do. Activity levels are as we expected despite a series of challenges related to the COVID-19 pandemic. Earnings have recovered and delivered to the high end of guidance. We have also made progress in resolving claims and that is reflected in significantly improved cashflows in the half.
What's the outlook for NRW for the remainder of FY22?
NRW advised that pandemic restrictions have continued for longer than previously anticipated. This has led to some challenges around recruiting staff for specific trades on future projects.
Nonetheless, the business is seeking to capture growth opportunities across the resources, infrastructure and renewables sectors.
The pipeline of opportunities currently stands at $19.5 billion. The order book has increased to $4 billion compared to $3.4 billion in June 2021. This is likely to continue growing following the completion of contract extension negotiations with Coronado Coal.
Revenue guidance for the full year remains between $2.4 billion to $2.5 billion. NRW noted that it has secured work in hand for the remaining six months of FY22 that supports the revenue forecast at the low end of the range.
In addition, earnings guidance (EBITA) for the full year has been updated to a range of $150 million to $155 million, reflecting the strong first-half results.
