SSH Group’s Debt Cuts and Cash Flow Surge Signal Stronger Mining Services Outlook
SSH Group Ltd reports a strong Q2 FY25 with a 89% increase in operating cash flow and a significant 19% reduction in equipment-backed debt, while securing a preferred tender notice for a major gold mining project.
- Operating cash flow rises 89% to $1.7 million in Q2 FY25
- Seven consecutive quarters of positive operating cash flow
- 12-month equipment-backed debt reduced by 19% to $20.7 million
- Preferred tender notice received for Western Gold Resources' Gold Duke Project
- 12-month customer cash receipts total $47.1 million
Robust Cash Flow Performance
SSH Group Ltd (ASX: SSH) has delivered a notable financial performance in the December 2024 quarter, reporting a 89% increase in operating cash flow to $1.7 million compared to the previous quarter. This marks the company’s seventh consecutive quarter of positive operating cash flow, underscoring a sustained improvement in operational efficiency and cash management.
Over the rolling 12 months to December 31, 2024, SSH Group generated customer cash receipts totaling $47.1 million, reflecting steady revenue streams across its mining, civil, and construction service segments.
Strategic Debt Reduction
Alongside improved cash flow, SSH Group has aggressively targeted its equipment-backed debt, achieving a 19% reduction over the past year. The company reduced its asset-backed liabilities from $25.6 million in December 2023 to $20.7 million by the end of 2024, through a combination of regular repayments, asset divestments, and capital optimisation strategies.
This deleveraging effort not only strengthens the balance sheet but also enhances financial flexibility, positioning SSH Group to better navigate market uncertainties and invest in growth opportunities.
New Contract Opportunity at Gold Duke Project
Operationally, SSH Group secured a significant milestone by receiving a preferred tenderer notice from Western Gold Resources (ASX: WGR) for project management services at the Gold Duke Project in Western Australia. This non-binding notice pertains to a Master Services Agreement for a turnkey solution encompassing site establishment, mining, and ore haulage.
The Gold Duke Project, located west of Wiluna, is a highly prospective gold mining site, and this contract could provide SSH Group with a valuable foothold in a key mining region, potentially driving future revenue growth and operational scale.
Financial Discipline and Forward Outlook
SSH Group’s disciplined approach to cash flow management and debt reduction reflects a broader strategic focus on sustainable growth and operational resilience. The company’s unaudited management accounts indicate a positive trajectory, though investors should note the forward-looking statements carry inherent risks and uncertainties.
With $2.2 million in cash and $5.7 million in unused financing facilities available at quarter-end, SSH Group appears well-positioned to fund ongoing operations and capitalise on new contract opportunities.
Bottom Line?
SSH Group’s financial momentum and new contract prospects set the stage for a pivotal year ahead in mining services.
Questions in the middle?
- How will the preferred tender at Gold Duke Project translate into revenue and profit growth?
- What are the company’s plans for further debt reduction or capital investment in FY25?
- How sustainable is the current positive cash flow trend amid fluctuating mining sector conditions?
