LGI Reports 5.4% Revenue Growth and $7.26M EBITDA in H1 FY25

Steady Financial Performance Amid Operational Expansion

LGI Limited, a leading Australian landfill gas and carbon abatement company, has released its H1 FY25 results, showcasing modest revenue growth and a stable EBITDA margin despite rising depreciation and interest expenses. The company reported net revenue of $15.56 million, a 5.4% increase over the prior corresponding period, supported by a surge in Australian Carbon Credit Units (ACCUs) pricing which reached a two-year high in November 2024.

Underlying EBITDA remained steady at $7.26 million with a margin of 47%, reflecting operational efficiencies and the benefits of recent infrastructure upgrades. However, underlying EBIT declined slightly to $4.22 million, impacted by increased depreciation following the Canberra power station upgrade and higher interest costs due to additional debt funding.

Operational Highlights and Project Developments

LGI's operational footprint continues to expand, with 32 contracted landfill gas sites including eight power stations and 17 carbon credit sites. The company secured new contracts with councils in Lithgow, Southern Downs, Midcoast, and Western Downs, while converting the Grafton site to a carbon credit operation. These developments underpin LGI's strategy to 'chase the gas' and maximise biogas recovery across its network.

Significant progress was made on key projects such as the Canberra power station upgrade, which increased generation capacity by 50%, and the commissioning of the Mugga Lane site with six engines now exporting to the grid. The Eastern Creek project is advancing with earthworks completed and major plant deliveries scheduled, positioning LGI for further growth in renewable electricity generation in H2 FY25.

Revenue Diversification and Market Dynamics

LGI's diversified revenue streams encompass electricity sales, ACCU generation, and infrastructure services. While electricity and Large-scale Generation Certificates (LGCs) revenues declined due to normalization of electricity hedge prices post-energy crisis, ACCU revenue surged by 39%, reflecting strong carbon credit market conditions. The company’s vertically integrated model allows flexibility in managing ACCU releases to support capital expenditure and cash flow needs.

Electricity generation showed underlying growth in megawatt-hours, aided by the Canberra upgrade and the upcoming Eastern Creek power station. LGI also benefits from electricity price volatility in the National Electricity Market, leveraging its battery capabilities and proprietary Dynamic Asset Control System (DACS) to optimise dispatchable renewable energy output.

Balance Sheet and Cash Flow Position

LGI’s asset base grew to $94.6 million, primarily funded through operating cash flows from ACCU sales. The company maintains a conservative debt position with $24 million drawn against a $49 million facility, providing ample headroom for ongoing investments. Capital expenditure in H1 FY25 focused on power station equipment and gas extraction infrastructure, largely funded by operating cash flow and financing activities.

Outlook and Strategic Priorities

Looking ahead, LGI reaffirms its FY25 guidance, targeting 12-15% growth in underlying EBITDA, contingent on market conditions and project execution timing. The company remains focused on health, safety, environmental standards, and quality while advancing key projects and expanding gas collection capabilities. LGI is also exploring further power station expansions on contracted sites and actively pursuing new landfill gas management opportunities to sustain its growth trajectory.

Industry recognition continues to affirm LGI’s innovative approach, with multiple awards for environmental innovation and sustainable infrastructure projects, underscoring its leadership in Australia’s clean energy and carbon abatement sectors.