ALS Releases Strong FY21 Results amid COVID-19 impacts

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ALS Releases Strong FY21 Results amid COVID-19 impacts

  • Net profit after tax (NPAT) increased by $44.8 million with a total of $172.6 million.
  • Life sciences division experienced a growth of 72 bps.
  • Greater outcomes achieved through efficient operating model and strict costing control

ALS Limited (ALQ) has in its FY21 results, achieved a 35.1 per cent increase of full-year net attributable profit, lifted by its life sciences and commodities divisions. The group’s $44.8 million Net profit after tax (NPAT) was offset by impairment losses through a one-off gain from the sale of their Chinese business. Operating in over 65 countries, ALQ is a laboratory and testing service company covering the mining, industrial, and life sciences sectors.

A repayment of COVID-19 related government subsidies of up to $3 million in Australia (under the job keeper program) and $20.5 million in Canada will be voluntarily provided by ALQ as part of its initiative. However, the 5 per cent decline of revenue from operations at $1,761.4 million compared to FY20 were offset by dividend distributions at 14.6 cents that will be paid on the 5th of July. This is a 31.3 per cent increase from last year, contributing to a 60 per cent FY21 payout ratio reflecting improved liquidity position and company performance.

ALQ’s life sciences division posted a rise of 72 basis points (bps) in earnings before interest, tax, depreciation, and amortization (EBITDA) margin, a 16.2 per cent increase compared to FY20. The gains were achieved from an alignment of the costs-based model on client’s demands, more substantial volumes and strengthening of ALQ’s balance sheet. On a separate note, the group’s commodities division presented an increase by 199 bps, amounting to an EBITDA of 27.6 per cent due to gains in volume by miners, execution of the combined global ‘hub and spoke’ model and strengthening of commodity prices.

Moreover, an increase by 102 per cent of underlying EBITDA cash conversion (compared to 98 per cent in FY20) was achieved through a drop in Days of Sales Outstanding (DSO) amid COVID-19 pandemic impacts. The group has also implemented strict capital expenditure (CAPEX) control. This is evident following a 33 per cent decrease in spending through more focused growth investments such as automation of life sciences operations and Geochemistry laboratory expansion capacity, as supported by growing demand.

An increase in economic activity post COVID-19 pandemic has driven a significant boost in ALQ’s performance. Life sciences will continue to be resilient with strong organic growth of 1.9 per cent in 2H FY21 and margin expansion from the company’s continuous provision of essential testing services to clients. Increased mining activities from both major and junior miners have positively impacted ALQ’s commodities division, seeing a steady growth into early FY22. With a strong balance sheet, efficient operating model and strict costing control, the company is confident of achieving even greater outcomes for its shareholders.

Louis Mosmann

Louis Mosmann is a Private Wealth Client and Research Assistant at KOSEC- Kodari Securities. Louis covers macroeconomic events, global markets and ASX300 company announcements, allowing clients to make more informed investment decisions. Email Louis at

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