XRF’s Record Half-Year Profit Highlights Risks from Raw Material Price Swings

Strong Half-Year Growth Amid Global Mining Activity

XRF Scientific Ltd (ASX: XRF) has delivered a standout half-year result for the six months ending December 2024, posting record revenue and profit figures. The company’s revenue surged to $28.7 million, while profit before tax increased 13% to $7.0 million, reflecting sustained demand from the mining industry worldwide.

Managing Director Vance Stazzonelli highlighted that the mining sector continues to be the primary growth driver, with international sales expanding across Asia, the Americas, and Europe. The company’s installed base of analytical machines is generating growing recurring revenue streams, particularly through consumable sales and platinum labware recycling.

Consumables and Capital Equipment Lead the Charge

The Consumables division was a star performer, delivering a record profit before tax of $3.6 million from $9.6 million in revenue. This growth was achieved without significant increases in fixed costs, underscoring operational efficiency. The division benefited from strong product volume sales, supported by a successful cross-selling strategy that encouraged customers to purchase multiple products.

Meanwhile, the Capital Equipment division posted a profit before tax of $1.8 million on $10.1 million in revenue. Notably, the Orbis crushers segment nearly doubled its profit contribution compared to the prior half-year, aided by expanded sales distribution. The integration of Labfit into XRF’s Perth manufacturing facility is progressing well and is expected to enhance operational synergies in the coming quarter.

Precious Metals Division Returns to Profitability

The Precious Metals division generated $10.3 million in revenue and $1.7 million in profit before tax. Recurring orders from mining customers remained strong, driven by ongoing sample testing needs and platinum labware recycling. The company’s German office returned to profitability during the half, a positive sign for its European operations.

Despite a reduction in lithium chemical prices during the period, which lowered selling prices and production costs, profit per unit sold remained steady. This stability suggests XRF’s pricing and cost management strategies are effectively mitigating raw material volatility.

Cash Flow and Dividend Outlook

Operating cash inflow more than doubled to $4.4 million, reflecting improved cash generation alongside profit growth. The Board has maintained its policy of paying one dividend per year, to be determined after the full-year results are finalised.

Looking ahead, XRF’s broad geographic footprint and diversified product portfolio position it well to capitalise on ongoing mining sector activity and industrial quality control demand. However, the company’s future performance will remain sensitive to commodity price fluctuations and global economic conditions.