Half Year 2026 Capral Ltd Earnings Call

August 24, 2026

Speaker #2: Thank you for standing by, and welcome to the Capral Limited first half 2026 results webinar. All participants are in a listen-only mode. There will be a presentation, followed by a question-and-answer session.

Operator: Thank you for standing by, and welcome to the Capral Limited H1 2026 Results Webinar. All participants are in a listen-only mode. There will be a presentation followed by a question and answer session. If you wish to ask a question, you will need to press the star key followed by the number 1 on your telephone keypad. I would now like to hand the conference over to Tony Dragicevich, Chief Executive Officer and Managing Director. Please go ahead.

Operator: Thank you for standing by, and welcome to the Capral Limited H1 2026 Results Webinar. All participants are in a listen-only mode. There will be a presentation followed by a question-and-answer session. If you wish to ask a question, you will need to press the star key followed by the number one on your telephone keypad. I would now like to hand the conference over to Tony Dragicevich, Chief Executive Officer and Managing Director. Please go ahead.

Speaker #2: If you wish to ask a question, you will need to press the star key followed by the number 1 on your telephone keypad. I would now like to hand the conference over to Tony Dragisovich, Chief Executive Officer and Managing Director.

Speaker #2: Please go ahead.

Speaker #3: Good morning, everyone. Welcome to Capral's first half results presentation. I'm joined this morning by our CFO, Tershis Kabul, whom many of you will have met in the past, and also by Luke Hawkins, the General Manager of our Industrial Business and our Supply Chain. Luke also heads up our Anti-Dumping and Government Advocacy.

Tony Dragicevich: Good morning, everyone. Welcome to Capral's H1 results presentation. I am joined this morning by our CFO, Tertius Campbell, who many of you will have met in the past, and also by Luke Hawkins, the General Manager of our industrial business and also our supply chain. Luke also heads up our anti-dumping and government advocacy. Luke will be helping us with the presentation today. All right. Firstly, turning to the agenda, I will run through the business overview and the H1 highlights. Tertius, including Luke, will talk a bit about the industrial business in particular. Tertius will run through the financials. Then I will come back and talk about strategy and outlook and then guidance to finish up. Turning to slide 3, the Capral business at a glance. Capral is Australia's leading supplier of aluminium extrusion and rolled products.

Tony Dragicevich: Good morning, everyone. Welcome to Capral's H1 results presentation. I am joined this morning by our CFO, Tertius Campbell, who many of you will have met in the past, and also by Luke Hawkins, the General Manager of our industrial business and also our supply chain. Luke also heads up our anti-dumping and government advocacy. Luke will be helping us with the presentation today. All right. Firstly, turning to the agenda, I will run through the business overview and the H1 highlights. Tertius, including Luke, will talk a bit about the industrial business in particular. Tertius will run through the financials. Then I will come back and talk about strategy and outlook and then guidance to finish up. Turning to slide three, the Capral business at a glance. Capral is Australia's leading supplier of aluminium extrusion and rolled products.

Speaker #3: So, Luke will be helping us with the presentation today. All right, firstly, turning to the agenda, I will run through the business overview and the first-half highlights.

Speaker #3: Tershis will, including Luke, talk a bit about the Industrial Business in particular. Tershis will run through the financials, and then I'll come back and talk about strategy and outlook, and then guidance to finish up.

Speaker #3: So, turning to slide 3, the Capral business at a glance. Capral is Australia's leading supplier of aluminium extrusion and rolled products. We've got six manufacturing plants around the country.

Tony Dragicevich: We have 6 manufacturing plants around the country, 65,000 ton of annual extrusion capacity, 24 distribution centers, 19 regional distribution centers, 15 trade centers. The key markets we play in are residential and commercial building, and also a wide range of industrial markets, the largest being transport, marine, and infrastructure. Overall, the revenue for the last 12 months is around AUD 730 million. Our market share sits at approximately 27% of the aluminium market in Australia, downstream aluminium market, and we have in excess of 1,000 employees. Moving to the H1 highlights on page 4. A really solid H1 despite challenging market and supply chain conditions.

Tony Dragicevich: We have six manufacturing plants around the country, 65,000 ton of annual extrusion capacity, 24 distribution centers, 19 regional distribution centers, 15 trade centers. The key markets we play in are residential and commercial building, and also a wide range of industrial markets, the largest being transport, marine, and infrastructure. Overall, the revenue for the last 12 months is around AUD 730 million. Our market share sits at approximately 27% of the aluminium market in Australia, downstream aluminium market, and we have in excess of 1,000 employees. Moving to the H1 highlights on page four. A really solid H1 despite challenging market and supply chain conditions.

Speaker #3: 65,000 tons of annual extrusion capacity. We have 24 distribution centers, 19 regional distribution centers, and 15 trade centers. The key markets we play in are residential and commercial building, as well as a wide range of industrial markets, the largest being transport, marine, and infrastructure.

Speaker #3: Overall, the revenue for the last 12 months is around $730 million. Our market share sits at approximately 27% of the aluminium downstream market in Australia, and we have in excess of 1,000 employees.

Speaker #3: So, moving to the first half highlights on page 4. A really solid first half, despite challenging market and supply chain conditions. Certainly, the Middle East conflict played havoc on aluminium supply chains internationally.

Tony Dragicevich: Certainly, the Middle East conflict played havoc on aluminium supply chains internationally in the H1 of the year, and also on Capral, and Luke will talk a little bit about that in more detail later on through the presentation. That led to material higher global metal prices, which drove higher sales revenue on slightly higher volume. The residential market remains subdued, and we expect the recovery to be gradual. Strong operating cash generation and a net cash position. Our margins held up well through disciplined cost and pricing management, and we have a strong balance sheet supporting continued capital investment. Moving to the detailed highlights on page 5. I will not go through all of these. I will just pick out the major ones I want to talk about.

Speaker #3: In the first half of the year, and also on Capral—and Luke will talk a little bit about that in more detail later on through the presentation.

Speaker #3: That led to materially higher global metal prices on slightly higher volume. The residential market remains subdued, and we expect recovery to be gradual. Strong operating cash generation and a net cash position.

Speaker #3: Our margins held up well through disciplined cost and pricing management, and we have a strong balance sheet supporting continued capital investment. So, moving to the detailed highlights on page 5.

Speaker #3: I won't go through all of these. I'll just pick out the major ones I want to talk about. So, overall, a nice improvement in earnings in a challenging market, and the standout was our strong cash generation and strong cash balance at the end of 30th of June.

Tony Dragicevich: Overall, a nice improvement in earnings in a challenging market, and the standout was our strong cash generation and strong cash balance at the end of 30 June. Our volume up 4% to 32,500 tonnes. Revenue up 14%, driven by the higher metal pricing, particularly LME, which I spoke about earlier. Our underlying EBIT up 4% to AUD 16.7 million, and our underlying EBITDA up 5% to AUD 29 million. Net profit after tax, just under AUD 16 million, up 4%. Last year's number did include a AUD 2.5 million tax benefit, and this year's included a positive LME revaluation. Overall, earnings per share up 9% to AUD 0.994 per share. Net tangible assets up 6% to just over AUD 13.40. As I mentioned earlier, a very strong net cash position, AUD 62 million, on the back of our best-ever debtors collection in the month of June.

Speaker #3: So our volume is up 4% to 32,500 tons. Revenue is up 14%, driven by the higher metal pricing, particularly LME, which I spoke about earlier. Our underlying EBIT is up 4% to $16.7 million, and our underlying EBITDA is up 5% to $29 million.

Speaker #3: Net profit after tax was just under $16 million, up 4%. Last year's number did include a $2.5 million tax benefit, and this year's included a positive LME revaluation.

Speaker #3: Overall, earnings per share are up 9% to 99.4 cents per share. Net tangible assets are up 6% to just over $13.40. As I mentioned earlier, we have a very strong net cash position—$62 million—on the back of our best ever dealer collections in the month of June.

Speaker #3: So, really pleased about that result, leading to strong operating cash flow. Our capital management—our share buyback—continued through the first half of 2026.

Tony Dragicevich: Really pleased about that result, leading to strong operating cash flow. Our capital management, our share buyback continued through the H1 of 2026. We managed to buy back on-market equivalent of AUD 0.23 per share, which was slightly down on the AUD 0.27 per share in the H1 of last year. Similar to last year, no interim dividend. But clearly it is our intention to top up the share buyback with a final dividend. I will let Tushar talk a little bit more about that later in the presentation. Really pleased with our safety performance, best on record, 3.1 total reportable injury frequency rate, down from 5.9 last year. Turning to page 6, where we discuss our volume and our channels to market and sales mix.

Speaker #3: We managed to buy back on market $23, equivalent to 23 cents per share, which was slightly down on the 27 cents per share in the first half of last year.

Speaker #3: And, similar to last year, no interim dividend; but, clearly, it's our intention to top up the share buyback with a final dividend on it.

Speaker #3: Tershis talked a little bit more about that later in the presentation. Really pleased with our safety performance based on record—3.1 total reportable injury frequency rate, down from 5.9 last year.

Speaker #3: Now, turning to page 6, where we discuss our volume and our channels to market and sales mix. We have diversified our channels quite extensively over the last five or six years, and that supports our overall resilience, particularly in the downturn in the housing cycle.

Tony Dragicevich: We have diversified our channels quite extensively over the last 5 or 6 years, and that supports our overall resilience, particularly in the downturn in the housing cycle. As I mentioned earlier, H1 volume up 4%, with the growth primarily coming from our distribution channel, which is a channel where we have made a number of strategic investments over the past 5 years. Our industrial business now represents 50% of our total volume. That is up from 41% in 2017. That is broadening our demand on our business beyond just the building cycle, and it does reduce our earnings cyclicality. Our residential exposure, as we have spoken about previously, is weighted to detached and low-rise dwellings. The high-rise multi-residential dwellings, the high-rise apartment market, has become the domain of fully fabricated imported windows and doors.

Speaker #3: So, as I mentioned earlier, first-half volume is up 4%, with the growth primarily coming from our distribution channel, which is a channel where we've made a number of strategic investments over the past five years.

Speaker #3: Our industrial business now represents 50% of our total volume. That's up from 41% in 2017. And that's broadening our demand on our business beyond just the building cycle.

Speaker #3: And it does reduce our earnings cyclicality. Our residential exposure, as we've spoken about previously, is weighted to detached and low-rise dwellings. The high-rise multi-residential dwellings—the high-rise apartment market—has become the domain of fully fabricated, imported windows and doors.

Speaker #3: So, as we're just talking about imports—imports of both extrusion and fully fabricated windows continue to impact the Australian aluminium market. In particular, the big change over the last couple of years has been the growth in imported fully fabricated windows.

Tony Dragicevich: So as we were just talking about imports of both extrusion and fully fabricated windows continue to impact upon the Australian aluminum market. In particular, the big change over the last couple of years has been the growth in imported fully fabricated windows. As a result of that, the Australian Window Association, together with the largest window fabricator in Australia, have jointly taken an anti-dumping case, which is currently in progress, and Luke will speak a little bit about that later in the presentation. So where we sit at the moment, our channels to market are around 50% of our volume goes directly from our mills to our large customers. Then out through our distribution business, 32% of that is extrusion through our distribution business and 16% in rolled products. So rolled, we made sheet and plate aluminum.

Speaker #3: And as a result of that, the Australian Windows Association, together with the largest window fabricator in Australia, have jointly taken an anti-dumping case which is currently in progress, and Luke will speak a little bit about that later in the presentation.

Speaker #3: So, where we sit at the moment, our channels to market are: around 50% of our volume goes directly from our mills to our large customers.

Speaker #3: And then, through our distribution business, 32% of that is extrusion, and 16% is rolled products. Rolled, we mean sheet and plate aluminium.

Speaker #3: The chart on the bottom right hand side of the page represents our 6-monthly sales going back to 2017. And as you can see, the second half sales typically or volumes are typically higher than the first half as we head into the summer months where there's more building activity.

Tony Dragicevich: The chart on the bottom right-hand side of the page represents our H1 sales going back to 2017. As you can see, the H2 sales are typically, or volumes are typically higher than the H1 as we get into the summer months where there is more building activity, and we get more feet on the ground and out there in the marketplace. So we are looking forward to, once again, volume in the H2 of the year. Turning to page 7. Specifically here, residential. While our exposure to the residential market has fallen a bit in recent years, it is still by far our single largest segment that drives our volume. Just to note that our demand typically lags commencement by around 2 quarters. If we look at this graph, we can see in 2023/2024, the cycle low, and 2025, the market stabilizing.

Speaker #3: And we get more feet on the ground and out there in the marketplace. So we are looking forward to, once again, a definite volume in the second half of the year.

Speaker #3: Okay, turning to page 7, specifically here: residential. So, while our exposure to the residential market has fallen a bit in recent years, it is still by far our single largest segment that drives our volume.

Speaker #3: Just to note that our demand typically lags commencement by around two quarters. And if we look at this graph, we can see in 2023–24, the cycle low.

Speaker #3: And 2025, the market stabilizing. And then this year, 2026, starting to see a lift in housing commencements, albeit we are yet to see that volume start to flow through.

Tony Dragicevich: Then this year, 2026, starting to see a lift in housing commencements, albeit we are yet to see that volume start to flow through. But we do expect it to start flowing through in the H2 of 2026. Beyond this year, the forecast, as you can see on the slide, for good solid growth in the housing market. A reasonable proportion of that is in the green parts of the graph on which our sales are primarily planned, which is the low-rise and housing market, but also strong growth in high-rise apartments as well. I think the thing to note here is that the impact of the recently announced tax changes by the federal government, I think the budget was in May, have created a fair bit of uncertainty in the last couple of months about what that means for all investments, but for us particularly.

Speaker #3: But we do expect it to start flowing through in the second half of 2026. Beyond this year, the forecast, as you can see on the slide, is for good, solid growth in the housing market. A reasonable proportion of that is in the green parts of the graph, on which our sales are primarily planned—which is the low-rise and housing market—but also strong growth in high-rise apartments as well.

Speaker #3: I think the thing to note here is that the impact of the recently announced tax changes by the federal government—I think the budget was in May—have created a fair bit of uncertainty in the last couple of months about what that means for, I guess, all investments, but for us, particularly relevant for Capral is the investment in residential housing.

Tony Dragicevich: Relevant for Capral is the investment in residential housing. So while there is a, as I said, a fair bit of uncertainty about that at the moment and the knock-on impact leading to lower house prices immediately. We do think that given the underbuild of housing in Australia over the last decade, that with the tax changes favoring new build, that once the market settles, that we should see continued strong growth in the new housing market as a result. Now moving to a few examples of projects recently completed. So on page 8, just want to highlight here some projects completed by our fabricators. The first 2 are upmarket homes completed by Busselton Aluminium in WA using Capral's AGS framing systems, and also an upmarket home there on the Sunshine Coast, fabricated by Elite Aluminium using our upmarket residential system and also our framing systems as well.

Speaker #3: So, while there is, as I said, a fair bit of uncertainty about that at the moment and the knock-on impact leading to lower house prices immediately, we do think that, given the underbuilding of housing in Australia over the last decade, and with the tax changes favoring new build, once the market settles we should see continued strong growth in the new housing market as a result.

Speaker #3: Okay, now moving to a few examples of projects recently completed. On page 8, I just want to highlight here: these are projects completed by our fabricators. The first two are upmarket homes completed by Bustleton Aluminium in WA.

Speaker #3: Using Capral's AGS framing systems, and also an upmarket home there on the Sunshine Coast fabricated by Elite Aluminium using our upmarket residential system, and also our framing systems as well.

Speaker #3: Then, turning to commercial buildings—examples are on the next page—just to give you some idea of where our products end up. So, we have a shopping center or outlet center in New South Wales.

Tony Dragicevich: Then turning to commercial building examples on the next page. Just to give you some idea of where our products end up. We have a shopping center or outlet center in New South Wales, produced by Elite. We have a train station in WA, the Nicholson Road station. You can see a lot of aluminum used in these new infrastructure projects. Then we have on the far right-hand side, a medical clinic in Charlestown in New South Wales, with the fabricator there being PCW from up in the Central Coast. Now turning to the industrial sector. I am just going to let Luke, who heads up this part of our business, talk to this slide.

Speaker #3: Produced by Elite. We have a train station in WA, the Nicholson Road station. You can see a lot of aluminium used in these new infrastructure projects.

Speaker #3: And then we have, on the far right-hand side, a medical clinic in Charleston in New South Wales, with a fabricator there being PCW from up in the Central Coast.

Speaker #3: Okay, now turning to the industrial sector. I'm just going to let Luke, who heads up this part of our business, talk to the slide.

Speaker #2: Thanks, Tony. So what we can see here is that, looking at the key market segments, the transport sector has been pretty steady. You can see it's stabilized from the 2025 downturn and has been pretty stable into '26.

Luke Hawkins: Thanks, Tony. What we can see here is, looking at the key market segments, the transport sector has been pretty steady. You can see it has stabilized from the 2025 downturn, and it has been pretty stable into 2026, and we expect that to continue through. The marine segment has been particularly strong for us, particularly the heavy commercial ferry class. We have seen strong growth with Incat, RDM, and to a lesser extent, Austal in the defense space, and Echo Marine. The solar segment, which is a bit of a longer-term play, we are working with potential beneficiaries of the government's Solar Sunshot solar panel startup programs. We are starting to see some initial volumes with one existing panel manufacturer. In the industrial construction segment, we have seen strong uptake with regard to cladding replacement.

Speaker #2: And we expect that to sort of continue through. The marine segment has been particularly strong for us, particularly the heavy commercial ferry class. So we've seen strong growth with Incat, RDM, and to a lesser extent, Austal in the defense space.

Speaker #2: And Ecomarine. The solar segment, which is a bit of a longer-term play, we are working with potential beneficiaries of the government’s Sunshot solar panel startup programs.

Speaker #2: And we are starting to see some initial volumes with one existing panel manufacturer. In the industrial construction segment, we've seen strong uptake with regard to cladding replacement.

Speaker #2: That continues to evolve and continues to gain momentum, and we'd expect that to continue for several years yet. And equally, we're starting to see benefit in the data center space.

Luke Hawkins: That continues to evolve and continues to gain momentum, and we expect that to continue for several years yet. Equally, we are starting to see benefit in the data center space. In that space, we are able to provide into the server racking and arrays space. Both the ceilings and flooring systems in some of these also have a significant aluminum content, as does the facade and exterior, I guess, provide opportunity. It is an emerging area, and obviously, we expect to get more benefits across the coming years in that space, particularly leveraging our ESG-certified products in comparison to imports. The manufacturing space has continued. Manufacturing general fabrication segment has remained relatively steady, and we have held our share gains against imports over the last couple of years. I have been particularly interested in the reseller space.

Speaker #2: So in that space, we're able to provide, into the server racking and arrays space, both the ceilings and flooring systems in some of these.

Speaker #2: Also, it has a significant aluminium content, as does the facade exterior, which I guess provides opportunity. It is an emerging area, and obviously we expect to get more benefits across the coming years in that space, particularly benefiting from leveraging our ESG certified products in comparison to imports.

Speaker #2: The manufacturing space has continued. Manufacturing in general and the fabrication segment have remained relatively steady, and we've held our share gains against imports over the last couple of years.

Speaker #2: I'll be particularly interested in the reseller space. We have seen BlueScope announce a significant reduction in their aluminium distribution capacity, with an exit from Western Australia and a significant reduction in South Australia, Victoria, and New South Wales.

Luke Hawkins: We have seen BlueScope announce a significant reduction in their aluminum distribution capacity with an exit from Western Australia, significant reduction in South Australia, Victoria, and New South Wales. That is presenting opportunity for us, particularly in the transport sector and marine segment, and we are looking to shore that up. We have managed to secure a purchase agreement for a significant portion of their inventory to help us enter into that market more holistically. You can see, I guess our volume down the bottom index from 2012 has shown that we have maintained reasonable growth across the last couple of years. Moving to the next slide, we have got a few examples of what we have been discussing there. What you can see on the left is an RDM, Richardson Devine Marine, has constructed a fleet of Sydney ferries. That one there is recently completed.

Speaker #2: That's presenting opportunity for us, particularly in the transport sector and marine segment. We're looking to shore that up, and we've managed to secure a purchase agreement for a significant portion of their inventory to help us enter into that market more holistically.

Speaker #2: And you can see, I guess, our volume down the bottom, indexed from 2012, has shown that we've maintained reasonable growth across the last couple of years.

Speaker #2: Moving to the next slide, we've got a few examples of what we've been discussing there. So, what you can see on the left is an RDM, Richardson Divine.

Speaker #2: Marine has constructed a fleet of Sydney ferries. That one there is recently completed. Equally, in the transport segment, to give you a feel for where our metal goes, there are some aluminium tippers there produced by Bulk Transport Equipment in Victoria.

Luke Hawkins: Equally in the transport segment, to give you a feel for where our metal goes, there is some aluminum tippers there produced by Bulk Transport Equipment in Victoria. On the right-hand side, you can see Aussie Play. We have a number of customers in that segment producing park furniture, producing playground equipment, et cetera, for right across the country.

Speaker #2: And then on the right-hand side, you can see Aussie Play. So, we've got a number of customers in that segment producing park furniture, playground equipment, etc.

Speaker #2: for right across the country.

Speaker #3: I think we're about to show one of our Crafted with Capral videos featuring Aussie Play. So, something a little bit different, just to show the diversity of where our products end up.

Tony Dragicevich: I think we are about now to show one of our Crafted with Capral videos, featuring Aussie Play. Something a little bit different just to show the diversity of where our products end up.

Speaker #4: We supply all sorts of resources and equipment to early learning sectors, primary schools, councils, and everywhere else. Being able to design the product one day and see a prototype the next is the real strength of Australian manufacturing.

[Company Representative] (Aussie Play): We supply all sorts of resources and equipment to early learning sectors and primary schools and councils and everywhere else. Being able to design the product one day and see a prototype the next is the real strength of Australian manufacturing. When we say Australian-made, we literally do every single aspect. We do not buy in pieces and just bolt it together. We cut it all, we bend it all, mold it, weld it, assemble it. We are true manufacturers. There was no aluminum in playground equipment, so we brought that new material to the range, and it sort of set the benchmark that that is what it needs to be as a minimum. The entire time, really, I have been buying my aluminum through Capral. So it has been a long relationship.

[Video Narrator]: We supply all sorts of resources and equipment to early learning sectors and primary schools and councils and everywhere else. Being able to design the product one day and see a prototype the next is the real strength of Australian manufacturing. When we say Australian-made, we literally do every single aspect. We do not buy in pieces and just bolt it together. We cut it all, we bend it all, mold it, weld it, assemble it. We are true manufacturers. There was no aluminum in playground equipment, so we brought that new material to the range, and it sort of set the benchmark that that is what it needs to be as a minimum. The entire time, really, I have been buying my aluminum through Capral. So it has been a long relationship.

Speaker #4: When we say Australian made, we literally do every single aspect. We don't buy in pieces and just bolt it together; we cut it all.

Speaker #4: We bend it all, fold it, weld it, assemble it—we are true manufacturers. There was no aluminium in playground equipment, so we brought that new material to the range.

Speaker #4: And it sort of set the benchmark that that's what it needs to be as a minimum. The entire time, really, I've been buying my aluminium through Capral.

Speaker #4: So it's been a long relationship. The beauty of Capral is that, because it's made in Australia, we can always talk to Marianne and say, "We've got some urgent stuff going on."

[Company Representative] (Aussie Play): The beauty of Capral is that because it is made in Australia, we can always talk to Mary Ann and say, "We have got some urgent stuff going on." And sure enough, a couple of days later, we have got those products here in stock ready to go. One of the beautiful things about playground equipment is we can design a playground, and then when you watch the children on it, they do not do anything along the lines of what you think. They do something totally different. That is what brings the real pleasure in designing something, is seeing how the children engage with it and what it makes them think and what makes it fun and challenging for them. I love that. I think that is really, really important.

[Video Narrator]: The beauty of Capral is that because it is made in Australia, we can always talk to Mary Ann and say, "We have got some urgent stuff going on." And sure enough, a couple of days later, we have got those products here in stock ready to go. One of the beautiful things about playground equipment is we can design a playground, and then when you watch the children on it, they do not do anything along the lines of what you think. They do something totally different. That is what brings the real pleasure in designing something, is seeing how the children engage with it and what it makes them think and what makes it fun and challenging for them. I love that. I think that is really, really important.

Speaker #4: And sure enough, a couple of days later, we've got those products here in stock, ready to go. One of the beautiful things about playground equipment is we can design a playground.

Speaker #4: And then, when you watch the children on it, they do not do anything along the lines of what you think. They do something totally different.

Speaker #4: That's what brings the real pleasure in designing something—seeing how the children engage with it, what it makes them think, and what makes it fun and challenging for them.

Speaker #4: I love that. I think that's really, really important.

Speaker #3: Okay, we'll now turn to our financials, so I will hand over to Tirches. Thank you, Tony. Let me take you through the first half financials.

Tony Dragicevich: Okay. We now turn to our financials. I will hand over to Tertius to take.

Tertius Campbell: Thanks, Tony. Let me take you through the H1 financials. Three things frame this half. The metal costs rose materially and remain volatile. It is a dominant influence on the results, on our revenue, on our cost of sales, and on our working capital. Earnings were resilient in the face of the higher cost across the business. We finished the half with a stronger balance sheet and materially better cash generation than the prior corresponding half. I will take each of these in turn, but just before I do that, I will ask Luke to just talk about the metal cost component.

Speaker #3: Three things frame this half. The metal cost rose materially, and then remained volatile. It is the dominant influence on the result—on our revenue, on our cost of sales, and on our working capital.

Speaker #3: Earnings were resilient in the face of higher costs across the business. We finished the half with a stronger balance sheet and materially better cash generation than the prior corresponding half.

Speaker #3: I'll take each of these in turn, but just before I do that, if Luke could just talk about the metal cost component.

Speaker #2: So, certainly the Middle East crisis has provided significant volatility in metal costs. What you can see here, I guess that's driven by the fact that 9% of the world's aluminium is produced in the Gulf.

Luke Hawkins: Certainly, the Middle East crisis has provided significant volatility in metal costs. What you can see here, I guess that is driven by the fact that 9% of the world's aluminium is produced in the Gulf. Obviously, significant interruptions both to alumina supply in, the Strait of Hormuz being closed, has conspired to drive aluminium prices to an all-time high. What you can see here is that the average LME price compared to the same period last year was 17% higher. In addition to that, we are seeing regional premiums, in our case, the MJP being 22% above the corresponding period last year. That conflict is likely to continue to provide volatility over the coming months. It is one of the biggest drivers to our working capital going forward.

Speaker #2: And obviously, significant interruptions both to aluminium supply and the Strait of Hormuz being closed have conspired to drive aluminium prices to an all-time high.

Speaker #2: What you can see here is that the average LME price, compared to the same period last year, was 17% higher. In addition to that, we've seen regional premiums—in our case, the MJP—being 22% above the corresponding period last year.

Speaker #2: That conflict is likely to continue to provide volatility over the coming months, and it's one of the biggest drivers to our working capital going forward.

Speaker #3: Okay, just to the next slide, please. Revenue increased 14% to just over $372 million, on 4% higher volume. Higher average metal cost and improved mix.

Tertius Campbell: Okay. Just do the next slide, please. Revenue increased 14% to just over AUD 372 million, on a 4% higher volume, higher average metal cost and improved mix. The volume growth came mainly through this distribution channel, as Tony mentioned earlier. Underlying EBITDA increased to AUD 29 million and underlying EBIT increased 4% to AUD 16.7 million. The bridge is best read as a cost recovery. Our inflation, which is wages, freight, occupancy, reduced our EBIT by around AUD 6.2 million. That is what the price and productivity are set to recover. Price and mix contributed AUD 5.6 million and further savings and productivity throughout the business produced, AUD 1.3 million. So AUD 6.9 million against the AUD 6.2 million in inflation. So our inflationary cost was basically covered in full.

Speaker #3: The volume growth came mainly through this distribution channel, as Tony mentioned earlier. Underlying EBITDA increased to $29 million, and underlying EBIT increased 4% to $16.7 million.

Speaker #3: The bridge is best read as a cost recovery. Our inflation, which is wages, freight, occupancy, reduced our EBIT by around $6.2 million. That is what the price and productivity are set to recover.

Speaker #3: Price and mix contributed $5.6 million, and further savings and productivity throughout the business reduced costs by $1.3 million. So, $6.9 million against the $2.62 million in inflation.

Speaker #3: So our inflationary cost was basically covered in full. Compliance and other costs, you can see there on the bridge, at $2.1 million. Some of this is one-off items and won't be repeated.

Tertius Campbell: Compliance and other costs, you could see there on the bridge of AUD 2.1 million, of which some of it was, is one-off items and won't be repeated. The volume and growth added AUD 2 million, taking our underlying EBIT to AUD 16.7 million. Significant items were a net gain of AUD 1.3 million, mainly LME revaluation, giving us a statutory EBIT of AUD 18 million. Finance cost were AUD 2.1 million, of which AUD 2 million was due to AASB 16, the lease charges. Net profit before tax was AUD 15.9 million, up AUD 3.1 million. In the prior corresponding half, we carried AUD 2.5 million deferred tax benefit. We did not increase the DTA this half. Net profit after tax, AUD 15.9 million.

Speaker #3: And the volume and growth added $2 million, taking our underlying EBIT to $16.7 million. Significant items were a net gain of $1.3 million, mainly LME revaluation.

Speaker #3: Giving us a statutory EBIT of $18 million. Finance cost was $2.1 million, of which $2 million was due to AASB 16, the lease charges. Net profit before tax was $15.9 million, up $3.1 million.

Speaker #3: And in the prior corresponding half, we carried a $2.5 million deferred tax benefit. We did not increase the DTA this half. Net profit after tax was $15.9 million.

Speaker #3: And our earnings per share increased 9.5% to 99.4 cents per share, ahead of the 4% growth in profit, reflecting also the reduction in the shares on issue through the buyback.

Tertius Campbell: Our earnings per share increased 9.5% to AUD 0.994 per share, ahead of the 4% growth in profit, reflecting also the reduction in the shares on issue through the buyback. Turning to the next page. The balance sheet is stronger than what it was in December. Our net assets increased AUD 7.7 million to AUD 252 million. The net tangible asset per share increased 6% to AUD 13.43, supported by retained earnings and the continued buybacks. Inventory reduced by AUD 3.6 million. The metal cost rose 25% across the half. Thus, the lower inventory tons, which is mainly a reduction of delayed shipments, provided that assistance. Receivables increased AUD 27.9 million on a higher revenue and metal link pricing, and our collections were well-controlled and achieving a record low DSO in June.

Speaker #3: Turning to the next page. The balance sheet is stronger than what it was in December. Our net assets increased $7.7 million to $250.2 million.

Speaker #3: The net tangible asset per share increased 6% to $13.43, supported by retained earnings and continued buybacks. Inventory reduced by $3.6 million. The metal cost rose 25% across the half; thus, the lower inventory tons, which is mainly a reduction of delayed shipments, provided that assistance.

Speaker #3: Receivables increased $27.9 million on higher revenue and metal-linked pricing. Our collections were well controlled, achieving a record low DSO in June.

Speaker #3: Payables increased by $25.6 million, tracking the higher metal cost and some timing of the payments, which improved our cash position at the reporting date. Our working capital was broadly flat at $125 million, while as we saw sales grow, the working capital to sales improved to 17% on a 12-month basis.

Tertius Campbell: Payables increased AUD 25.6 million, tracking the higher metal cost, and some timing of the payments improved our cash position at the reporting date. Our working capital was broadly flat at AUD 125 million. While we saw sales grew, the working capital to sales improved to 17% on a 12-month basis. We ended the half with AUD 62.1 million cash and the syndicated facility in place with additional headroom, and we remain comfortably within our banking covenants. Our lease liabilities under AASB 16 totaled AUD 71.3 million. The accounting treatment reduced our net assets by around AUD 17 million, or AUD 1.09 per share, which is non-cash in nature. To the next slide. Operating cash flow was AUD 28.2 million against the AUD 7.8 million in the prior corresponding half. Most of that improvement is working capital. AUD 1 million released this half against the AUD 16.1 million build in the previous H1, a swing of AUD 17.1 million.

Speaker #3: We ended the half with $62.1 million in cash, and the syndicated facility in place with additional headroom. We remain comfortably within our banking covenants.

Speaker #3: Our lease liabilities under ASB16 totaled $71.3 million. The accounting treatment reduced our net assets by around $17 million, or $1.09 per share, which is non-cash in nature.

Speaker #3: To the next slide. Operating cash flow was $28.2 million, against $7.8 million in the prior corresponding half. Most of that improvement is working capital.

Speaker #3: $1 million released this half, against $16.1 million billed in the previous first half—a swing of $17.1 million. EBITDA growth contributed the balance.

Tertius Campbell: EBITDA growth contributed the balance. I would not read this half's conversion as a run rate. Payments for higher cost inventory falls due in the H2, and we expect working capital to increase. Capital expenditure was AUD 8.7 million across sustained and growth programs, directed at reliability, automation, and productivity. Our free cash flow was AUD 10.3 million after lease principal payments against an outflow of AUD 4.6 million in the prior corresponding half. We returned AUD 8.4 million to shareholders through the final dividend and the buybacks, and cash increased AUD 1.9 million before our foreign exchange effects. Trade instruments, letters of credit, were AUD 36.8 million, consistent with imported product flows and the higher metal pricing. The key points on this was cash generation was strong this half. The improvement was real, but there is an impact. Timing does have an impact on this. Next slide. Capital management.

Speaker #3: I would not read this half's conversion as a run rate. Payments for higher-cost inventory fall due in the second half, and we expect working capital to increase.

Speaker #3: Capital expenditure was $8.7 million across sustained and growth programs, directed at reliability, automation, and productivity. Our free cash flow was $10.3 million after lease principal payments, compared to an outflow of $4.6 million in the prior corresponding half.

Speaker #3: We returned $8.4 million to shareholders through the final dividend and the buybacks. And cash increased $1.9 million before our foreign exchange effects. Trade instruments, letters of credit, were $36.8 million, consistent with imported product flows and the higher metal pricing.

Speaker #3: The key point on this was that cash generation was strong this half. The improvement was real, but timing does have an impact on this.

Speaker #3: Next slide. Capital management. Our capital allocation framework remains unchanged. We target a cash distribution to shareholders of 40 to 60 percent of underlying earnings over time.

Tertius Campbell: Our capital allocation framework remains unchanged. We target a cash distribution to shareholders of 40% to 60% of underlying earnings over time, maintaining flexibility between our buybacks and unfranked dividends. in the H1, we bought back just over 300,000 shares at an average price of AUD 11.77, below the NTA per share of AUD 13.43, which is accretive to our earnings per share and to long-term shareholding value, shareholder value. That equates to AUD 0.23 per share against the AUD 0.27 in the prior corresponding H1. Around 2.2 million shares have now been purchased since we started this program. As Tony mentioned, we are not declaring any interim dividend at this time. Our intention for 2026 is to focus on returns via the buybacks, then top that up with unfranked dividends as required at full year. The 2026 program is for up to 10% of our issued shares.

Speaker #3: Maintaining flexibility between our buybacks and unfranked dividends. In the half, we bought back just over 300,000 shares at an average price of $1,177. This was below the NTA per share of $1,343, which is accretive to our earnings per share and to long-term shareholder value.

Speaker #3: Shareholder value—that equates to $0.23 per share, against $0.27 in the prior corresponding half. Around 2.2 million shares have now been purchased since we started this program.

Speaker #3: As Tony mentioned, we're not declaring any interim dividend at this time. Our intention for 2026 is to focus on returns via the buybacks, but then top that up with unfranked dividends as required at full year.

Speaker #3: The 2026 program is for up to 10% of our issued shares. Buying resumes tomorrow, 25 August, as soon as our results blackout lifts. Over the five years to June '26, Capral has delivered a total shareholder return of approximately 97%, or around 14.5% per annum compounded growth.

Tertius Campbell: Buying resumes tomorrow, 25 August, as soon as our results blackout lifts. Over the 5 years to June 2026, Capral has delivered a total shareholder return of approximately 97%, or around 14.5% per annum compounded growth. Capital returns are supported by the AUD 62 million in cash and our significant availability under our syndicated facility, preserving flexibility for growth and for through-cycle volatility. In summary, resilient earnings, a stronger balance sheet, disciplined capital management. That positions Capral well to manage volatility and the benefit of the residential demand recovery throughout the H2. With that, I will hand back to Tony.

Speaker #3: Capital returns are supported by the $62 million in cash and our significant availability under our syndicated facility, preserving flexibility for growth and for through-cycle volatility.

Speaker #3: In summary, resilient earnings, a stronger balance sheet, and disciplined capital management position capital well to manage volatility and benefit if residential demand recovers throughout the second half.

Speaker #3: And with that, I'll hand back to Tony.

Speaker #2: Thank you, Sergius. I'll now turn to our strategy and outlook. We remain focused on increasing returns on invested capital, strengthening our competitive position, and growing our distribution footprint in what can be quite challenging market conditions within this industry.

Tony Dragicevich: Thank you, Tertius. I will now turn to our strategy and outlook. We remain focused on increasing returns on invested capital, strengthening our competitive position, and growing our distribution footprint in what can be quite challenging market conditions in this industry. We have a clearly defined strategy which has been consistent over the past decade or more, which consists of building on our strengths, which is we have the widest range of aluminium products. We have a national footprint. We have a strong development of our own aluminium systems and our supply chain. Last but not least, committed and experienced people. The second leg of our strategy is optimizing what we do.

Speaker #2: We have a clearly defined strategy, which has been consistent over the past decade or more. This consists of building on our strength, which is that we have the widest range of aluminium products.

Speaker #2: We have a national footprint. We have strong development of our own aluminium systems and our supply chain. And last but not least, we have committed and experienced people.

Speaker #2: The second leg of our strategy is optimizing what we do. We continue to focus on our key customer service metrics, driving manufacturing in our plants.

Tony Dragicevich: We continue to focus on our key customer service metrics, drive lean manufacturing in our plants, invest in new technology, optimize our supply chain to maximize our efficiencies, and protect our margins through very careful price management and continue to improve our productivity. The third leg is growing for the future, so leveraging these capabilities into new opportunities, developing new products and channels, which we continually do. Enhancing our presence in the architectural market has been a big focus in the past 5 years and continues to gain us market share and profitability. Expanding our footprint through acquisition and into adjacent markets. You can be aware that we have completed, I think, 5 or 6 small acquisitions over the past few years, and we will continue to do that as the opportunities arise.

Speaker #2: Invest in new technology, optimize our supply chain to maximize our efficiencies and protect our margins through careful price management, and continue to improve our productivity.

Speaker #2: The third leg is growing for the future, so leveraging these capabilities into new opportunities. Developing new products and channels, which we continually do. Enhancing our presence in the architectural market has been a big focus in the past five years.

Speaker #2: And continues to gain us market share and profitability, and expanding our footprint through acquisition and into adjacent markets. So, you can be aware that we've completed, I think, five or six small acquisitions over the past few years, and we will continue to do that as the opportunities arise.

Speaker #2: Moving to the next slide, just in terms of the key things going on around our business. Firstly, manufacturing—we're continuing to drive productivity and metal recovery improvements across our extrusion network.

Tony Dragicevich: Talking, next slide, just in terms of the key things that are going on around our business. Firstly, manufacturing. Continuing to drive productivity and metal recovery improvements across our extrusion network, ensure that we can continue to spend money on our plants to maintain their reliability. We have some major CapEx projects coming up this year at our Canning Vale site in WA and our Bremer Park site in Queensland. At Canning Vale, we are rebuilding the press, and at Bremer Park, we are putting in the first electric furnace in the Southern Hemisphere will be installed at our plant up in Southeast Queensland. We are very proud of that and looking forward to those two projects being successfully completed over the Christmas break. We are progressively upgrading our shop floor control systems, and we are continuing to develop and deliver automation and digital initiatives in our manufacturing operations.

Speaker #2: Ensure that we can continue to spend money on our plants to maintain their reliability. We've got some major capital projects coming up this year at our Canning Vale site in WA and our Bremer Park site in Queensland.

Speaker #2: At Canning Vale, we're rebuilding the press, and at Bremer Park, we're putting in the first electric furnace in the Southern Hemisphere, which will be installed at our plant up in southeast Queensland.

Speaker #2: So we're very proud of that and looking forward to those two projects being successfully completed over the Christmas break. We're progressively upgrading our shop floor control systems.

Speaker #2: And we're continuing to develop and deliver automation and digital initiatives in our manufacturing operations. In terms of our distribution business or distribution channel, we continue to focus on developing our own window and door systems and range, and we had a big product release two years ago with introducing a new residential system. The focus currently is on upgrading our commercial systems.

Tony Dragicevich: In terms of our distribution business or distribution channel, we continue to focus on developing our own window and door systems and range. We had a big product release 2 years ago with introducing our new residential systems, and the focus currently is on upgrading our commercial systems. We want to grow our direct distribution channel organically and through acquisition. As I mentioned earlier, we have completed 5 since 2022, and just a couple of months ago, at the end of June, we opened a new trade center, Greenfield Trade Centre in Geelong, the first new Aluminium Trade Centre for Capral in how many years, Luke?

Speaker #2: We want to grow our direct distribution channel organically and through acquisition. As I mentioned earlier, we've completed five since 2022. And just a couple of months ago, at the end of June, we opened a new trade center, the Greenfield Trade Center in Geelong.

Speaker #2: The first new aluminium centre for Capral. And how many years, Lee? More than 20 years. So, very proud of that. And it's a great site, and we look forward to that site in Geelong, which is a really strong industrial area that will contribute over the forthcoming years.

Luke Hawkins: More than 20.

Tony Dragicevich: More than 20 years. So, very proud of that, and it is a great site, and we look forward to that site in Geelong, which is a really strong industrial area, and to contribute over the next forthcoming years. The Com Supply acquisition was completed late last year. That business has grown our presence in the window and door hardware market significantly. It is performing to expectation, slightly above expectation, and we are looking at expansion opportunities on the east coast of Australia in the years ahead, building on that. A big focus on margin discipline, particularly as our metal costs are moving around, and ensuring we stay ahead of the game in terms of recovering our inflationary metal cost increases and focusing on our working capital efficiency.

Speaker #2: The comp supply acquisition was completed late last year. That business has grown our presence in the window and door hardware market significantly. It's performing to expectations—slightly above expectation—and we're looking at expansion opportunities on the East Coast of Australia.

Speaker #2: In the years ahead, building on that, there's a big focus on margin discipline, particularly as our metal costs are moving around, and ensuring we stay ahead of the game in terms of recovering our inflationary metal cost increases.

Speaker #2: And focusing on our working capital efficiency—Luke alluded to or spoke about the opportunity, or the exit, of BlueScope from the aluminium distribution in, I think, all sites apart from Queensland, where they have quite a large presence. But certainly Western Australia, South Australia, Victoria, and New South Wales.

Tony Dragicevich: Luke alluded to or spoke about the opportunity or the exit of BlueScope from the aluminium distribution on the, I think, all sites apart from Queensland, where they have quite a large presence, but certainly Western Australia, South Australia, Victoria, and New South Wales. We have concluded an arrangement to acquire the inventory from BlueScope of Western Australia, and we are currently negotiating to do the same in the other states and take advantage of the opportunity that is presenting. Most of this is in sheet and plate. There is only a modest amount of extrusion. But by acquiring the inventory, it puts us into the best position to secure increased market share for Capral from these industrial markets. Anything else to add there, Luke?

Speaker #2: And we're looking to work—we've concluded an arrangement to acquire the inventory from BlueScope in Western Australia, and we're currently negotiating to do the same in the other states. That will take advantage of the opportunity that's presenting.

Speaker #2: Most of this is in sheet and plate. There is only a modest amount of extrusion. But acquiring the inventory puts us in the best position to secure increased market share for Capral from these industrial markets.

Speaker #2: Anything else there, David?

Speaker #3: I think that covers it. I think it's an opportunity where we haven't had to acquire the business, and we're looking to capitalize on it.

Luke Hawkins: I think that covers it. I think it is an opportunity where we have not had to acquire the business, and we are looking to capitalize on it. We have secured the inventory. We have got the opportunity in front of us.

Speaker #3: We've secured the inventory. We've got, I guess, the opportunity in front of us, so.

Speaker #2: Yes, okay. And then, as well as the marketing, we continue to invest in technology in this area around EDI, digital marketing. We're very active on that front.

Tony Dragicevich: Okay. In sales and marketing, we are continually investing in technology in this area around EDI, digital marketing. We are very active on that front and branding of the business, particularly in the industrial and in the architectural segments. This year, we will be implementing a new CRM system, so that is very exciting for our team, so that we are bringing all of our customer information together on one platform. We are expanding our lower carbon, LocAl, which is our local Capral-branded offer or LocAl offer for our low-carbon aluminium. We now have approved EPDs in place for those LocAl products. Our Crafted with Capral program continues and delivers positive outcomes for our customers. We have played a leading part in the resurrection of Australian Made Campaign this year. Our Smithfield site was selected as the campaign opening site in late January.

Speaker #2: And branding of the business, particularly in the industrial and architectural segments. This year, we will be implementing a new CRM system, so that’s very exciting for our team, as we’ll be bringing all of our customer information together on one platform.

Speaker #2: We're expanding our lower carbon LocAl, which is our local Capral branded offer—our local offer for our low carbon aluminium. And we now have approved EPDs in place for those LocAl products.

Speaker #2: Our Crafter with Capral program continues and delivers positive outcomes for our customers. And we have played a leading part in the resurgence of the Australian Made campaign this year.

Speaker #2: Our Smithfield site was selected as the campaign opening site in late January. We also conducted an event at the MCG featuring one of our fabricators, who makes the goalposts for all of the AFL and football games.

Tony Dragicevich: We also conducted an event at the MCG, featuring the. One of our fabricators makes the goalposts for all of the AFL and football games. So that was an exciting event as well. Right. So next slide, we now move on to antidumping, and I am going to hand this over to Luke. Luke has headed up our antidumping and government advocacy over the last close to a decade now, Luke, I would think.

Speaker #2: So that was an exciting event as well. Right, so next slide. We now move on to anti-dumping, and I'm going to hand this over to Luke.

Speaker #2: Luke's headed up our anti-dumping and government efficacy for close to a decade now, I would think, Luke. So, he's very close to what's going on in this area.

Luke Hawkins: That's right.

Tony Dragicevich: So very close to what's going on in this area. I'll let him speak to that.

Speaker #2: So I'll let him speak to that.

Speaker #3: So, I think, first of all, the slide points out that the impact of the US tariffs has no direct impact on Capral.

Luke Hawkins: I think, first of all, the slide points out that the impact of the US tariffs has no direct impact on Capral. We don't export directly to that market. We are dealing with some indirect consequences around trade flows. Broadly speaking, that's the biggest risk associated with it. One of the challenges around the Australian system is, I guess, it hasn't had a great deal of reform over the last decade, and it is an area where, I guess, a contemporary system is important to ensure that people don't work around it. In the aluminium extrusion context, we currently have measures in place against China that were renewed and extended for a further five years late last year, which puts them in place till 2030. They are relatively modest and have floor pricings in place.

Speaker #3: We don't export directly to that market, and we are dealing with some indirect consequences around trade flows. But, broadly speaking, that's the biggest risk associated with it.

Speaker #3: One of the challenges around the Australian system is, I guess, it hasn't had a great deal of reform over the last decade, and it is an area where, I guess, a contemporary system is important to ensure that people don't work around it.

Speaker #3: In the aluminium extrusion context, we currently have measures in place against China that were renewed and extended for a further five years late last year, which puts them in place until 2030.

Speaker #3: They are relatively modest and a floor price is in place. Similarly, in Malaysia and Vietnam, and there's sort of three different cases that covered those categories of products, but we have measures in place for a further five years—through to 2031—with a similar floor price and modest duties in place.

Luke Hawkins: Similarly, in Malaysia and Vietnam, there's sort of three different cases that cover those category of products. But we have measures in place for a further five years through to 2031 with a similar floor price and modest duties in place. The challenge around all those cases is that the measures aren't contemporary to the rising LME that's currently underway, and we're reviewing options with regard to that at the moment. The other case that Tony's already alluded to, which is most important for ourselves, is the window and doors case. Ventura, one of our customers, in conjunction with AGWA, Australian Glass and Window Association, initiated a case on fully fabricated windows and doors end of last year, and that case is progressively coming closer to finalization.

Speaker #3: The challenge of all of those cases is that the measures aren't contemporary to the rising LME that's currently underway. And we're reviewing options with regards to that at the moment.

Speaker #3: The other case that Tony's already alluded to, which is most important for ourselves, is the window-indoors case. Ventura, one of our customers, in conjunction with AGWA—the Australian Glass and Window Association—initiated a case on fully fabricated windows and doors at the end of last year.

Speaker #3: And that case is progressively coming closer to finalization. It obviously has a significant impact on our customer base, particularly in that windows and doors space, but we're competing against fully fabricated imported windows and doors.

Luke Hawkins: It obviously has a significant impact on our customer base, particularly in that windows and doors space. We are competing against fully fabricated imported windows and doors. That case is due for a statement of essential facts. So a preliminary position to be released on or around 23 September this year, with its finalization date, as it currently stands, due on Christmas Eve. We continue to advocate for a strong, fair system across all of these product types, and we are heavily involved with the government with regard to consultation around further reform to strengthen their system and make it more relevant. Yeah, that is what is going on in that space.

Speaker #3: That case is due for a statement of essential facts. Our preliminary numbers and preliminary position are to be released on or around the 23rd of September this year, with a finalization date as it currently stands due on Christmas Eve.

Speaker #3: And we continue to advocate for a strong, fair system across all of these product types, and we're heavily involved with the government in relation to consultation around further reform to strengthen the system and make it more relevant.

Speaker #3: But yeah, that's what's going on in that space.

Speaker #2: Thank you, Luke. Now turning to our ESG—first of all, safety. As I mentioned earlier, one of the highlights for us in the first half was improvement in our safety performance, and I am very proud of what we've been able to achieve there.

Tony Dragicevich: Thank you, Luke. Now turning to our ESG. First of all, safety. As I mentioned earlier, one of the highlights for us in H1 was improvement in our safety performance, and very proud of what we have been able to achieve there. We continue to work very hard to ensure we provide a safe place for our people to work. EPDs. We have now EPDs for our LocAl products, and we are the only ASI-certified extruder in Australia, allowing us to provide a chain of custody guarantee for our customers. Now with the EPDs in place, it puts us into a strong position locally versus our competition to sell a lower carbon product into both the built environment and the industrial environment as well. As far as emissions are concerned, we are on track to achieve our 2030 target of a 20% reduction in Scope 1 and Scope 2.

Speaker #2: We continue to work very hard to ensure we provide a safe place for our people to work. EPDs—we now have EPDs for our local products, and we are the only ASI-certified extruder in Australia, allowing us to provide a chain of custody guarantee for our customers. Now, with the EPDs in place, this puts us in a strong position locally versus our competition to sell lower-carbon product into both the built environment and the industrial environment as well.

Speaker #2: As far as emissions are concerned, we are on track to achieve our 2030 target of a 20% reduction in Scope One and Scope Two.

Speaker #2: We're well down the path of analyzing our Scope 3 emissions, which, as you are probably aware, will primarily come from the aluminium raw material we buy from our smelters and also from the aluminium sheet and plate that we import.

Tony Dragicevich: We are well down the path of analyzing our Scope 3 emissions, which as you would probably be aware, will primarily come from the aluminium raw material we buy from our smelters and also from the aluminium sheet and plate that we import. Sustainability reporting. Well, we have been through our first climate report. We are one of the first cabs off the rank being a December financial year. So our 2025 climate report was issued earlier this year and not without its challenges, being one of the first to release, but a huge amount of work to get that up and running and not to be underestimated the complexity and the challenges this provides for all businesses in Australia, not just ASX-listed companies. Okay. Let us now move to what will be next? Outlook and guidance. Okay. We are on the home straight. Market conditions.

Speaker #2: Sustainability reporting—well, we've been through our first climate report. We're one of the first cabs off the rank, being a December financial year, so our 2025 climate report was issued earlier this year.

Speaker #2: And not without its challenges. Being one of the first to release, we had a huge amount of work to get that up and running, and not to be underestimated is the complexity and the challenges this provides for all businesses in Australia.

Speaker #2: Not just ASX-listed companies. Okay, let's now move to what will be next: outlook and guidance. Okay, we're on the home straight. Market conditions, as I said earlier, demand is forecast to lift in the second half of 2026 as commencements start to flow through.

Tony Dragicevich: As I said earlier, demand is forecast to lift in H2 2026 as the commencements start to flow through. Industrial demand has softened from recent highs, but we expect it to remain broadly stable this year in H2 of the year. LME and premiums are expected to remain volatile while the conflict in the Middle East continues. We will continue as an organization to focus on productivity, recovery, and cost control and have a disciplined approach to CapEx. As a result of that, our full-year earnings are expected to be broadly aligned with prior year, depending on some recovery of the residential housing market start to flow through into H2, which we expect. Metal cost volatility, freight cost, and residential commencements remain the key sensitivities. So that is the outlook and the guidance.

Speaker #2: Industrial demand has softened from recent highs, but we expect it to remain broadly stable in the second half of the year. LME and premiums are expected to remain volatile while the conflict in the Middle East continues.

Speaker #2: We will continue as an organization to focus on productivity recovery and cost control, and maintain a disciplined approach to capital expenditure. As a result, our full-year earnings are expected to be broadly in line with the prior year, depending on some recovery in the residential housing market.

Speaker #2: So the flow through into the second half, which we expect. Metal cost volatility, freight cost, and residential commencements remain the key sensitivities. So that's the outlook and guidance.

Speaker #2: And I think that is a wrap for our presentation, and we can now move to see if there are any questions that may come through.

Tony Dragicevich: I think that is a wrap for our presentation. We can now move to see if there are any questions that may come through.

Speaker #1: Thank you. If you wish to ask a question from the phones, please press star one on your telephone and wait for your name to be announced.

Operator: Thank you. If you wish to ask a question from the phones, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star two. If you are on a speaker phone, please pick up the handset to ask your question. Your first question comes from Andrew Johnston of MST Access. Please go ahead.

Speaker #1: If you wish to cancel your request, please press star two. If you are on a speakerphone, please pick up the handset to ask your question.

Speaker #1: Your first question comes from Andrew Johnston of MST Access. Please go ahead.

Speaker #4: Oh, good morning, gentlemen. Yes, another great result in what looks like a pretty tough environment. I have a couple of quick questions, if I can roll through them.

Andrew Johnston: Good morning, gentlemen. Yeah, another great result in what looks like a pretty tough environment. Just a couple of quick questions if I can roll through them. The CapEx outlook for FY27, what sort of numbers should we be thinking about for 2027?

Speaker #4: The CAPEX outlook for FY27—have you, is there a, what sort of number should we be thinking about for '27?

Speaker #3: A little bit lower than the current year—around about 10 million—is where we anticipate next year to be.

Tertius Campbell: A little bit lower than current year. Around AUD 10 million is where we anticipate next year to be.

Speaker #4: Okay, Tony. The proprietary building systems have been, I think, an important part of the margin improvement over the last few years. How is that tracking?

Andrew Johnston: Okay. Tony, the proprietary building systems that have been, I think, an important part of the margin improvement over the last few years, how is that tracking?

Speaker #2: It's very well. We have, as you said, Andrew, we've put a big investment in over the last probably five or six years now since we started on this program to grow our Building Systems business.

Tony Dragicevich: Yes, very well. We have, as you said, Andrew, put a big investment in the last probably 5, 6 years now when we started on this program to grow our building systems business. It has borne fruit and continues to do so. We are growing our market share in this area. We have the installation of the paint line here in Sydney. It has helped deliver a far better service to our building system customers, not only in New South Wales, but also Victoria and Queensland, able to utilize this line to provide faster turnaround for our customers and good quality, powder-coated, high-quality powder-coated product. We have developed, as I said during the presentation, a new range of residential suites, not only the entry-level, but also the higher-end residential suites, which we have now been in the market for nearly 2 years.

Speaker #2: It's starting, it has borne fruit and continues to do so. We are growing our market share in this area. The installation of the paint line here in Sydney has helped deliver a far better service to our building system customers, not only in New South Wales but also Victoria and Queensland.

Speaker #2: Utilizing able to utilize this line to provide faster turnaround for our customers and good quality powder coated high quality powder coated product. We have developed as I said during the presentation a new range of residential suites, not only the entry level but also the higher end residential suites which we've now been in the market for nearly two years.

Speaker #2: And the focus in the last 12 months has been on redeveloping our commercial range, which we are consistently doing. So we are, together with our security offer, with our Amplimesh brand, hitting out our security offer.

Tony Dragicevich: The focus in the last 12 months has been on redeveloping our commercial range, which we are consistently doing. Together with our security offer, with our Amplimesh brand heading our security offer, and our hardware business with Com Supply coming on board, we are developing a much stronger and more resilient building systems division, but also a much more resilient and stronger Capral overall.

Speaker #2: Our hardware business, with CompSupply coming on board, is developing a much stronger and more resilient Building Systems division, but also a much more resilient and stronger capital overall.

Speaker #4: Okay. If I'm right, when you made the acquisition of CompSupply, you talked about leveraging that model into the East Coast. Correct me if I'm wrong on that, but I thought there was something around that.

Andrew Johnston: Okay. If I am right, when you made the acquisition of Com Supply, you talked about leveraging that model into the East Coast. Correct me if I am wrong on that, but I thought there was something around that. Can you just talk to-

Speaker #4: Can you just talk to.

Speaker #2: That's correct, Andrew. We're not quite there yet. We are looking at both greenfield opportunities as well as acquisitions in this area, which we haven't quite concluded at this point in time.

Tony Dragicevich: That is correct, Andrew. We are not quite there yet. We are looking at both greenfield, but also acquisitions in this area as well, which we have not quite concluded at this point in time. But certainly it is top of mind and is core part of our strategy.

Speaker #2: But certainly, it is top of mind and is a core part of our strategy.

Speaker #4: Okay, excellent. And just finally, the BlueScope exit. You're requiring the inventory—have the closure of their sites left any meaningful geographic gaps that need to be filled?

Andrew Johnston: Okay, excellent. Just finally, the BlueScope exit. You are acquiring the inventory. Has the closure of their sites left any meaningful geographic gaps that need to be filled?

Speaker #2: Well, that's a very good question. We already play in the major markets. Probably the only one that is a gap, which we haven't got our heads around yet, is the Albury-Wodonga area.

Tony Dragicevich: Well, that is a very good question. We already play in the major markets. Probably the only one that there is a gap which we have not got our heads around yet is the Albury-Wodonga-

Tertius Campbell: They have a presence in regional New South Wales-

Luke Hawkins: They have a presence in regional New South Wales-

Speaker #3: We have a presence in regional New South Wales.

Tony Dragicevich: Regional New South Wales.

Speaker #2: Regional New South Wales, which we don't have in that region. So, yes, it's early days, but certainly it's something we will be looking at.

Tertius Campbell: That we don't have.

Luke Hawkins: That we don't have.

Tony Dragicevich: Which we don't have in that region. This is early days, but certainly it's something we will be looking at.

Speaker #4: Okay. That's it for David.

Andrew Johnston: Okay. That's it for me.

Speaker #2: We do have competitors in those regions already.

Tony Dragicevich: We do have competitors in those regions already.

Speaker #3: We do, yeah.

Tertius Campbell: We do, yeah.

Luke Hawkins: We do, yeah.

Speaker #2: Yeah.

Speaker #4: Yeah. Okay. Okay. So does it just the question is the question obviously you've asked is does it justify opening a new site there when you've already got competitors in that space?

Tony Dragicevich: Yeah.

Andrew Johnston: Yeah. Okay. The question obviously you've asked is does it justify opening a new site there when you've already got competitors in that space?

Speaker #2: Yeah. Right.

Tony Dragicevich: Yeah. Right.

Speaker #4: Okay, all right. No, I appreciate that. Okay, thanks again and well done. I mean, I know you did too. I know the working capital will reverse a bit, but I think that was a massive surprise.

Andrew Johnston: Okay. All right. No, appreciate that. Thanks again. Well done. I know the working capital will reverse a bit, but I think that was a massive surprise. Are you giving any guidance around what the cash might look like at the end of the year? If normal working capital levels were maintained, not on a dollar basis, but on a volume basis, what would the cash have looked like in the H1?

Speaker #4: Have you given any guide have you given any guidance around what the cash might look like at the end of the year or if it wasn't for if it wasn't for if normal working capital levels were maintained and not on a dollar basis but on a volume basis, what would the cash have looked like in the first half?

Speaker #2: Second half. Look, yeah, look, we have done some work on it, but I don't think—we haven't got the numbers yet—but it will be lower than the first half.

Tony Dragicevich: H2. Well, we have done some work on it. We haven't got the numbers yet, but it will be lower than the H1, there's no doubt about that.

Speaker #2: There's no doubt about that, because we've also taken in the inventory acquisition on the BlueScope side, to the tune of $8 to $9 million.

Andrew Johnston: Yeah. Okay.

Tony Dragicevich: Because we've also taken it. The inventory acquisition on the BlueScope side is to the tune of AUD 8 to 9 million, so it's not insignificant as well.

Speaker #2: So it's not insignificant as well, and that will take some time to work through. So it will be quite lower—I'm going to say significantly lower—than what it is at half year, as a result of the lag and the higher middle cost, with suppliers being paid.

Tertius Campbell: Of course, yeah.

Andrew Johnston: Of course, yeah.

Tony Dragicevich: That will take some time to work through.

Tertius Campbell: Yes

Tony Dragicevich: I am going to say significantly lower than what it is at H1 as a result of the lag and the higher metal cost suppliers being paid and the acquisition of BlueScope.

Speaker #2: And the BlueScope acquisition of BlueScope. This is as good as anything.

Tertius Campbell: Right

Tony Dragicevich: This is a good anything.

Speaker #3: Yeah, no, no. That's true. And obviously, Andrew, it depends on what happens with the LME for the remainder of the year. So if LME goes up again, then it will have a bigger drag on the working capital.

Tertius Campbell: Yeah. No, that's true. Andrew, depends on what happens with the LME for the remainder of the year.

Tony Dragicevich: Sure.

Tertius Campbell: If LME goes up again, then it will have a bigger drag on the working capital.

Speaker #4: Okay. All right. Great. Thanks very much. I've taken more than my share of time. Thank you.

Andrew Johnston: Okay. All right. Great. Thanks very much. I've taken more than my share of time. Thank you.

Speaker #2: That's okay. All right, any other questions?

Tony Dragicevich: That's okay. All right. Any other questions?

Speaker #1: Again, if you wish to ask a question from the phones, please press star, then one.

Operator: Again, if you wish to ask a question from the phones, please press star then one.

Speaker #3: We do have a number of questions on the web if there are none on the call, Allison.

Tertius Campbell: We do have a number of questions on the web if there is none on the call, Allison.

Speaker #1: Did you want to proceed, or take Andrew?

Operator: Did you want to proceed or take Andrew-

Speaker #3: Yeah, I think let me ask, and if there's a Q1 we can carry on with that then. Okay. So, first question here is from Mr. Alan Menzies from Bangor Family Trust.

Tertius Campbell: Well, I think let me ask, and if there is a call one, we can carry on with that then. Okay. So the first question here is from Mr. Alan Menzies from Bangor Family Trust. He says Australia's manufacturing cost base continues to increase relative to imported products. As you look over the next 5 to 10 years, how do you think about the competitiveness of Capral's Australian manufacturing footprint? Under what circumstances would you consider further rationalization, consolidation, or investment in your plants? Do you believe maintaining a broad domestic manufacturing footprint remains a long-term competitive advantage?

Speaker #3: As Australia's manufacturing cost base continues to increase relative to imported products, as you look over the next 5 to 10 years, how do you think about the competitiveness of Capral's Australian manufacturing footprint?

Speaker #3: Under what circumstances would you consider further rationalization, consolidation, or investment in your plants? And do you believe maintaining a broad domestic manufacturing footprint remains a long-term competitive advantage?

Speaker #2: That is an excellent question, and one that we don't ask ourselves every day, but certainly when we come around to strategic planning and investment in our facilities.

Tony Dragicevich: That is an excellent question and one that we don't ask ourselves every day, but certainly when it comes around to strategic planning and investment in our facilities, yes, we do. This year marks 90 years of manufacturing in Australia for Capral, and I'm not sure whether they're going to be doing it in 90 years' time. But certainly in the next 5 years, we will continue to be, in the foreseeable future, a strong advocate for Australian manufacturing. Yes, it is getting hard. But we can compete. There's a reasonable freight cost to import aluminium from overseas. The supply chains are typically 2 to 3 months, particularly around certain times of the year where ports and shipping gets really busy. So there is a strong case to maintain local manufacturing and being close to our customers.

Speaker #2: Yes, we do. Look, this year marks 90 years of manufacturing in Australia for Capral. I'm not sure we're going to be doing it in 90 years' time, but certainly in the next five years, we will continue to be— in the foreseeable future— strong advocates for Australian manufacturing.

Speaker #2: Yes, it is getting hard, but we can compete. I mean, there is a fairly—there's a reasonable freight cost to import aluminium from overseas.

Speaker #2: The supply chains are typically two to three months, particularly around certain times of the year when ports and shipping get really busy. So there is a strong case to maintain local manufacturing and be close to our customers.

Speaker #2: However, it's quite right to ask the question, because clearly labor costs in Australia are going up. Our investment—we are able to offset that to a degree through automation—but the handling of aluminium and processing of aluminium cans does require labor.

Tony Dragicevich: However, quite right to ask the question because clearly, labor costs in Australia are only going up. Our investment, we are able to offset that to a degree through automation, but handling of aluminium and processing of aluminium does require labor. Energy is the other area where, despite being promised lower energy costs, we are paying more for energy than our competitors, albeit offshore competitors, albeit it represents less than 10% of our total conversion costs. So it is challenging, but the benefits of local manufacturing currently outweigh importing. Our customers value it, and it's one of the reasons why we have invested in our distribution business to ensure that we can continue to play a major part of the aluminium marketplace in terms of extruding and distribution. But it is a challenge.

Speaker #2: Energy is the other area where, despite being promised lower energy costs, we are paying more for energy than we are—than our competitors, albeit, sorry, offshore competitors.

Speaker #2: Albeit it represents less than 10% of our total conversion costs. So it is challenging, but the benefits of local manufacturing currently outweigh importing.

Speaker #2: Our customers value it, and it's one of the reasons why we have invested in our distribution business, to ensure that we can continue to play a major part, or be a major part, of the aluminium market, both in terms of extruding and distribution.

Speaker #2: But it is a challenge. A key part of that is to ensure that we have a robust anti-dumping environment here in Australia. We can reasonably compete against imported product as long as it's not dumped.

Tony Dragicevich: A key part of that is to ensure that we have a robust anti-dumping environment here in Australia. We can reasonably compete against imported product as long as it's not dumped. That's been the challenge of a number of countries around the world because dumped aluminium subsidized by very large governments, both in terms of smelting and downstream extrusion, have caused us challenges over the last decade or more. But with the work we do on that front, and with government being acutely aware of the challenges and to prevent dumping into the country, we believe we've got a good future to continue manufacturing. It may not be for another 90 years, but certainly for the foreseeable future.

Speaker #2: And that's been the challenge of a number of countries around the world, because dumped aluminium—subsidized by very large governments, both in terms of smelting and downstream extrusion—have caused us challenges over the last decade or more.

Speaker #2: But with the work we do on that front, and with government being acutely aware of the challenges and working to prevent dumping into the country, we believe we've got a good future to continue manufacturing.

Speaker #2: It may not be for another 90 years, but certainly for the foreseeable future.

Speaker #3: I've got another question from Mr. Menzies: Could you talk through your expectations for maintenance and growth capital expenditure over the next 3 to 5 years?

Tertius Campbell: I've got another question from Mr. Menzies. Could you talk through your expectations for maintenance and growth CapEx over the next 3 to 5 years? Specifically, how should shareholders think about the balance between sustaining the existing manufacturing network versus investing in capacity expansion, automation, and productivity initiatives? Given the strength of the balance sheet, should we expect CapEx to remain around historical levels, or do you see a period of increased investment ahead?

Speaker #3: Specifically, how should Shell think about the balance between sustaining the existing manufacturing network versus investing in capacity expansion, automation, and productivity initiatives? Given the strength of the balance sheet, should we expect CapEx to remain around historical levels, or do you see a period of increased investment ahead?

Speaker #2: Look, our maintenance CapEx our maintenance CapEx in our plants runs to between 4 and 5 million a year. So the growth and we've done we've invested significantly in that maintenance CapEx over the last 4 or 5 years with rebuilds of Penrith Canning Vale and Smithfield and Bremer Parknow.

Tony Dragicevich: Look, our maintenance CapEx in our plants runs to between AUD 4 million and AUD 5 million a year. We have invested significantly in that maintenance CapEx over the last four or five years, Tishias.

Tertius Campbell: Yeah.

Tony Dragicevich: With rebuilds of Penrith, Canning Vale, Smithfield, and Bremer Park now. That runs to the tune of AUD 4 million to AUD 5 million every year. The other CapEx we are looking at in terms of growth CapEx is around paint lines and automation of our plants. That investment will also probably be in a similar number, probably AUD 3 million to AUD 4 million to AUD 5 million, depending on the project and the timing. One of the things we are also considering, albeit yet to be put in front of the board, is automation of our warehousing environments. There are quite sophisticated high-bay automated warehousing facilities for aluminium extrusion that operate in Europe and in the US in particular. We are looking at those, but that is more of a one-off type project, but they are quite expensive.

Speaker #2: So that runs to the tune of $4 to $5 million every year. The other CapEx we're looking at, in terms of growth CapEx, is around paint lines and automation of our plants.

Speaker #2: So that investment will also probably be in a similar range—probably $3 to $4 to $5 million, depending on the project and the timing. One of the things we're also considering, albeit yet to be put in front of the board, is automation of our warehousing environments.

Speaker #2: There are quite sophisticated high-bay automated warehousing facilities for aluminium extrusion that operate in Europe, and in the US in particular. So we are looking at those, but that's more of a one-off type project. They are quite expensive.

Speaker #2: We're talking about a significant capital investment—not so much in manufacturing, but in distribution—which would be to the tune of maybe around $20 million. This will be some sort of a one-off, but particularly, potentially transformative in terms of our aluminium distribution.

Tony Dragicevich: We are talking about a significant capital investment, not so much in manufacturing, but in distribution, which would be to the tune of maybe around AUD 20 million, which will be some sort of a one-off. But particularly, potentially transformative in terms of our aluminium distribution in Australia.

Speaker #2: In Australia.

Speaker #3: Okay, next question, again from Mr. Menzies, is just: what is your annual cash rent payment amount? And it's just north of $20 million is the answer there.

Tertius Campbell: Okay. Next question, again, from Mr. Menzies, is just what is your annual cash rent payment amount? It is just north of AUD 20 million is the answer there. Then we have got one question from Taz Davis from Nanset. Says, "Firstly, congratulations to management on another solid and consistent result. I also want to acknowledge the disciplined approach to capital management and the quality of Capral's communication with shareholders. The reporting is clear, transparent, and very useful. First question. You are forecasting residential commencements to begin flowing through to Capral's volumes in the H2. What are you actually seeing in current orders and customers' activities that gives you confidence that this recovery is now occurring rather than being pushed out again?

Speaker #3: Do you know if we've got a question from Taz Davies from Namset? He says, firstly, congratulations to management on another solid and consistent result.

Speaker #3: I also want to acknowledge the disciplined approach to capital management and the quality of Capital’s communication with Shell. The reporting is clear, transparent, and very useful.

Speaker #3: First question: You're forecasting residential commencements to begin flowing through to Capral's volumes in the second half. What are you actually seeing in current orders and customer activity that gives you confidence this recovery is now occurring, rather than being pushed out again?

Speaker #2: Yes. Well, it's not as strong as what we originally planned, but we have started to see in June and July that markets on the residential side were relatively soft, probably getting over the shock of the federal budget tax changes.

Tony Dragicevich: Well, it's not as strong as what we originally planned. But we have started to see in June and July, markets were relatively, in the residential side, relatively soft, probably getting over the shock of the federal budget tax changes. But in the month of August, we have started to see a lift in volume coming from those window fabricators. Albeit, as Luke mentioned, the local fabricators are being impacted by fully imported windows. So that is having a bit of a negative impact on the availability of our fabricators to market. But yes, we're starting to see the early signs of recovery in August. But certainly, it'd be fair to say that June and July were quite quiet.

Speaker #2: But in the month of August, we have started to see a lift in volume coming from those window fabricators. Albeit, as Luke mentioned, the local fabricators are being impacted by fully imported windows.

Speaker #2: So, that is having a bit of a negative impact on the availability of our fabricators to market. But yes, we're starting to see the early signs of recovery in August.

Speaker #2: But certainly, it'd be fair to say that June and July were quite quiet.

Speaker #3: Just a follow-up question as well: revenue increased 14% in the half, but underlying EBIT increased only 4%. With aluminium prices and premiums expected to remain elevated, how confident are you that pricing can fully recover those higher costs in the second half?

Tertius Campbell: Just a follow-up question as well is, revenue increased 14% in a half, but underlying EBIT increased only 4%. With aluminium prices and premiums expected to remain elevated, how confident are you that pricing can fully recover those higher costs in the H2? And should investors expect EBIT margin to return towards historical levels?

Speaker #3: And should investors expect EBIT margin to return towards historical levels?

Speaker #2: Yes. Another good question. A little bit difficult to answer. We typically particularly in our mill high volume business, we sell on a spread above the metal cost fixed spread which preserves our margin in a dollar per ton basis.

Tony Dragicevich: Yes. Another good question. A little bit difficult to answer. We typically, particularly in our mill high-volume business, we sell on a spread above the metal cost, fixed spread, which preserves our margin in a dollar-per-ton basis. But when we have rising prices, the percentage gross margin and percentage net margin falls as a result of the fixed KG pricing regime we have in place, which sort of is insurance with back-to-back metal pricing with our customers. So, as the metal pricing rises, our percentage margin does fall mathematically. But our spreads, if you like, or our gross margin per ton, remains consistent. We don't see that as a negative. In fact, it gives us a natural hedge against the ups and downs of the aluminium market.

Speaker #2: But when we have rising prices, the percentage gross margin and percentage net margin fall as a result of that fixed kilogram pricing regime.

Speaker #2: We have in place what is sort of an insurance with back-to-back metal pricing with our customers. So as the metal pricing rises, our percentage margin does fall, mathematically.

Speaker #2: But our spreads, if you like, or our gross margin per ton remains consistent, so we don’t see that as a negative. In fact, it gives us a natural hedge against the ups and downs of the aluminium market.

Speaker #2: So clearly, the reason why our sales revenue grew 14%, and our volume only grew 4%, was because it was a factor of higher metal prices flowing through to our selling prices.

Tony Dragicevich: Yeah, clearly the reason why our sales revenue grew 14% and our volume only grew 4% was because it was a factor of higher metal prices flowing through to our selling prices. Hope that answers your question adequately.

Speaker #2: Hope that answers the question adequately.

Tertius Campbell: That is it, and we do not have any more questions online. Allison, back to you.

Speaker #3: That's it. We don't have any more questions on the line. Alison, back to you.

Speaker #1: Thank you. And we have a follow-up question from Andrew Johnston of MST Access. Please go ahead.

Operator: Thank you. We have a follow-up question from Andrew Johnston of MST Access. Please go ahead.

Speaker #4: Oh, thank you. Just one extra question. Luke, around the your comments about the anti-dumping measures, wanting to make wanting to see those be more contemporary or the need for them to be more contemporary.

Andrew Johnston: Oh, thank you. Just one extra question. Luke, around your comments about the anti-dumping measures, wanting to see those be more contemporary or the need for them to be more contemporary. Can you just elaborate on that a little?

Speaker #4: Could you elaborate on that a little more?

Speaker #3: Yeah, sure, Andrew. The way the investigation works is it effectively measures the import prices through an investigation period, which, obviously, in our cases have different timelines, but they're not in recent times.

Luke Hawkins: Yeah, sure, Andrew. The way the investigation works is it effectively measures the import prices through an investigation period, which in obviously our cases have different timelines, but they are not in recent times. So they are two or three years old, and obviously we have seen a significant escalation in metal price in the last 12 months, which means that the measures in place are against an old average import price. The challenge around how do you make those measures become contemporary, and there is an investigation type of variable measures investigation that we could initiate, and are considering that at the moment on all our cases that we have completed.

Speaker #3: So they're two or three years old. And obviously, we've seen a significant escalation in metal prices in the last 12 months, which means that the measures in place are against an old average import price.

Speaker #3: The challenge is around how you make those measures become contemporary, and there is an investigation-type of variable measures investigation that we could initiate.

Speaker #3: And considering that, at the moment, on all our cases that we have, that we have completed.

Speaker #4: Okay. Sounds like they need a complete restructure of how they think about the whole measurement of it. But anyway, okay. Thanks.

Andrew Johnston: Okay. Sounds like they need a complete restructure of how they think about the whole measurement of it. Okay, thanks. I appreciate that. Yeah, absolutely.

Speaker #3: They're around that.

Speaker #4: Yeah. Yeah. Absolutely.

Speaker #2: Yeah. So that's one of the that's one of the reforms that we're strongly advocating for is that there is a much faster turnaround and quicker turnaround of these contemporary measures of what we call variable measures reviews.

Tony Dragicevich: That is one of the reforms that we are strongly advocating for, is that there is a much faster turnaround and quicker turnaround of these contemporary measures, what we call variable measure reviews. They typically can take up to how long, Luke, around?

Speaker #2: They typically can take up to how long, Luke? So they can take 12 to 18 months. By that time, the horse has sort of bolted.

Luke Hawkins: 12 to 18 months.

Tony Dragicevich: They can take 12 to 18 months. By that time, the horse has sort of bolted. But it is probably the top thing on our agenda with the terms of the annual reform packages.

Speaker #2: But it is one of the—well, it is probably the top thing on our agenda in terms of the anti-work done with more packages.

Speaker #3: That's right. And there's obviously a range of reforms that we've participated in consultation on that do address those issues longer term. We understand they're in Cabinet and confidence at the moment.

Luke Hawkins: That is right. There is obviously a range of reforms that we have participated in consultation that do address those issues longer term. We understand they are in cabinet-in-confidence at the moment, and we expect to hear further consultation opportunities in the new year. Under this government, there does seem to be the best opportunity for meaningful reform in this area that we have seen.

Speaker #3: We expect to hear further consultation opportunities in the new year. So, under this government, there does seem to be the best opportunity for meaningful reform in this area that we've seen.

Speaker #4: Okay, fingers crossed. Great, that's it from me. Thank you.

Andrew Johnston: Okay. Fingers crossed. Great, Dale. That is it from me. Thank you.

Speaker #2: All right. I think we may be—

Tony Dragicevich: All right. I think we may be.

Speaker #1: Yeah, I can turn back. Please proceed.

Operator: Yeah, I can turn back. Please proceed.

Luke Hawkins: Yes, sure.

Tony Dragicevich: Yes, sure.

Speaker #3: Yeah. Sure.

Speaker #2: Well, thank you, everyone, for your time this morning. Let's complete the presentation. It's been a solid first half for Capral in quite challenging conditions, particularly around aluminium supply and pricing.

Tony Dragicevich: Well, thank you everyone for your time this morning. That completes the presentation. It has been a solid H1 for Capral and quite challenging conditions, particularly around aluminium supply and pricing. We are looking forward to a lift in the H2 and delivering another solid result for the full year. Thank you for your attendance.

Speaker #2: We're looking forward to a lift in the second half and delivering another solid result for the full year. Thank you for your attendance.

Operator: That does conclude our conference for today. Thank you for participating. You may now disconnect.

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Half Year 2026 Capral Ltd Earnings Call

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