Austin Engineering boss David Singleton says he is confident the company will be able to attain future profitable revenue growth in Chile.
Austin Engineering boss David Singleton says he is confident the company will be able to attain future profitable revenue growth in Chile.
The comments come following news on Wednesday that the Perth-based truck parts and products engineer had revised its FY25 earnings before interest and tax from around $50 million to $41 million, primarily due to margin performance at its Chile-based facility.
“At the beginning of the financial year, Austin won a strategically important and potentially multi-year contract for supply of truck bodies to be delivered from its Chile facility,” the company said.
“This program has been demanding and necessitated a major ramp up, which has strained the capacity of the facility.
“Discussions on price variations have proven to be unsuccessful and following additional customer interactions, Austin now intends to redirect a significant proportion of production fulfilment for this contract to its manufacturing facility in Batam.
“This is expected to progressively allow for an improvement in the project margin in parallel with the development of the Chile site facility.
“However, in the short term this has led to the adjustment in the underlying FY25 EBIT forecast.”
In a statement to the market, Mr Singleton told shareholders Austin remained committed to enhancing its operational performance in Chile.
"We have continued to invest in capacity growth of our worldwide operations, allowing us to confidently build an order pipeline that is generating strong revenues in all business units,” he said.
“At the end of April 2025, the group total order book remained over $200 million and up 5 per cent compared to the same time last year.
“This gives us continued confidence in the strength of the business going forward.”
Along with this, Austin’s revenue guidance for FY25 rose by $20 million to approximately $370 million, primarily on the back of strong growth in the US.
Last month, in line with previous announcements, Sybrandt Van Dyk officially began his transition period as CEO, with Mr Singleton set to officially retire from the role on June 30.
As of 10.57am AWST, Austin shares were down 8 per cent to 34 cents.
