How Synertec’s Powerhouse Technology Sparked 90% Revenue Growth in FY25
Synertec Corporation reported an 8% revenue decline in FY25 but achieved a 15% improvement in normalised EBITDA, driven by a strong second-half rebound in Engineering and a 90% surge in Powerhouse revenue.
- Group revenue and cash receipts down 8% to $18.2m and $19.3m respectively
- Normalised EBITDA loss narrowed 15% to $2.8m due to cost reductions and restructuring
- Engineering segment shows strong second-half recovery with $2.2m normalised EBITDA
- Powerhouse technology revenue grows 90% to $2.0m, with expanding commercial opportunities
- Operating cash flow improves by $2.1m; capital flexibility maintained with Altor facility
Financial Overview
Synertec Corporation Limited (ASX, SOP) has released its FY25 financial results, revealing a mixed but cautiously optimistic picture. The company’s total revenue and cash receipts both declined by 8% compared to the prior year, reflecting ongoing sector headwinds. However, strategic cost-cutting and operational recalibration helped narrow the normalised EBITDA loss by 15%, from $3.3 million to $2.8 million.
Despite a net loss after tax widening slightly to $7.6 million, Synertec’s improved earnings before interest, tax, depreciation, and amortisation (EBITDA) metrics signal a company stabilising its core operations while investing in future growth.
Engineering Segment Resilience
The Engineering division, Synertec’s largest revenue contributor, faced a 13% revenue decline to $15.5 million. Yet, it demonstrated remarkable resilience with a strong second-half turnaround, delivering a normalised EBITDA of $2.2 million for the year, up from $0.8 million in FY24. This rebound followed decisive workforce reductions and overhead rationalisation in the first half, positioning the business for more sustainable profitability.
Management highlighted ongoing efforts to secure long-term contracts with government, utilities, and infrastructure clients, aiming to build a stable pipeline of recurring consultancy revenue. This strategic focus could underpin a more predictable revenue base in coming years.
Powerhouse Technology Gains Momentum
Synertec’s Powerhouse technology segment was the standout performer, nearly doubling revenue to $2.0 million. This growth was driven by proven industrial power solutions deployed in remote Queensland for Santos, boasting 99.9% availability and fossil fuel-free operation over five years. The company is actively advancing several new client opportunities, supported by strengthened supply chains and expanded product offerings.
The Powerhouse business is carving out a niche in the clean energy transition, appealing to resource operators and utilities seeking reliable, low-carbon power solutions in remote locations. This momentum could be a key driver of Synertec’s future growth and market differentiation.
Cash Flow and Capital Position
Synertec improved its net operating cash outflow by $2.1 million to $4.1 million, ending FY25 with $3.7 million in cash. The company retains access to a $15 million facility with Altor Capital, with $3.5 million drawn during the year and a $4 million supplementary termsheet secured post-year-end to support working capital needs. This capital flexibility provides a buffer as Synertec continues to invest in growth initiatives while managing costs tightly.
Looking Ahead
Managing Director Michael Carroll emphasized the company’s dual focus on engineering excellence and Powerhouse commercialisation. With a recalibrated workforce, streamlined operations, and a growing pipeline of long-term contracts, Synertec aims to deliver sustainable profitability. Meanwhile, Powerhouse’s proven track record and expanding market interest position it as a promising growth engine.
Investors will be watching closely as Synertec navigates the challenges of a competitive technology landscape while striving to capitalise on the global shift toward low-carbon energy solutions.
Bottom Line?
Synertec’s FY25 results reveal a company stabilising its core business and accelerating clean energy innovation, setting the stage for a pivotal growth phase.
Questions in the middle?
- How will Synertec convert its strong Powerhouse pipeline into sustained revenue growth?
- What impact will workforce reductions have on the company’s capacity to deliver large engineering contracts?
- How might evolving supply chain dynamics affect Powerhouse’s scalability and competitive edge?
