Overview of ALS Limited's trading update

ALS Limited (ASX:ALQ) has issued a trading update ahead of the half year ending 30 September 2024 (H1 FY25). The update highlights volume headwinds in the Minerals division, particularly in the Australian and Latin American markets, resulting in volume declines and margin pressure. However, the Life Sciences segment, especially Environmental, has shown organic growth in line with expectations. The integration of recent acquisitions of Nuvisan, Wessling, and York is progressing as planned, with Nuvisan witnessing positive medium and long-term improvements in the business development pipeline. Corporate costs are in line with guidance, while interest expense is slightly above due to higher average debt levels and lease interest costs from recent acquisitions. The company expects underlying EBIT to be slightly ahead of the prior corresponding period (pcp), but underlying NPAT is anticipated to be down by approximately 5% for the September half.

Executive commentary on trading update

The business has faced challenges in the Minerals division, particularly in the Australian and Latin American markets, resulting in volume declines and margin pressure. However, we are encouraged by the organic growth in our Life Sciences segment, especially in Environmental, which has met our expectations. The integration of recent acquisitions is progressing well, with Nuvisan showing positive signs for future business development. While corporate costs are in line with guidance, interest expense is slightly above due to higher average debt levels and lease interest costs from recent acquisitions. We anticipate that underlying EBIT will be slightly ahead of the prior corresponding period, but underlying NPAT is expected to be down by approximately 5% for the September half. We will provide a further update on our outlook with the H1 FY25 results, which will be announced on Tuesday 19 November 2024.

Summary of ALS Limited's trading update and outlook

ALS Limited (ASX:ALQ) has encountered volume headwinds in its Minerals division, particularly in the Australian and Latin American markets, leading to volume declines and margin pressure. However, the company has witnessed organic growth in its Life Sciences segment, especially in Environmental, meeting expectations. The integration of recent acquisitions of Nuvisan, Wessling, and York is progressing as planned, with positive signs for future business development. Despite corporate costs being in line with guidance, interest expense is slightly above due to higher average debt levels and lease interest costs from recent acquisitions. ALS Limited anticipates that underlying EBIT will be slightly ahead of the prior corresponding period, but underlying NPAT is expected to be down by approximately 5% for the September half. The company plans to provide a further update on its outlook with the H1 FY25 results, which will be announced on Tuesday 19 November 2024.