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Investing.com -- Morgan Advanced Materials reported first-half 2025 results with revenue declining less than feared, but warned of a challenging outlook that could lead to downgrades in earnings forecasts.
The company posted revenue of £523 million in the first half, representing an organic decline of 5.8% and a reported decline of 8.7%. Earnings before interest, taxes and amortization (EBITA) reached £58.0 million, resulting in an EBITA margin of 11.1%, down 140 basis points year-over-year.
Adjusted earnings per share fell 26.5% to 10.8p. Net debt stood at £249 million on a pre-IFRS 16 basis, with a net debt to EBITDA ratio of 1.7x.
The company’s performance varied across divisions. Thermal Products revenue dropped 8% organically to £195.5 million, with weakness across all key markets, particularly in industrials and metals.
Performance Carbon revenue fell 11% organically to £154.1 million due to challenging semiconductor conditions, though petrochemical and defense segments showed growth.
Technical Ceramics was the bright spot, with revenue up 3% organically to £173 million, as aerospace, defense, and clean energy growth offset semiconductor weakness.
Looking ahead, Morgan Advanced Materials expects full-year 2025 EBITA to be at the bottom end of the current consensus range of £115.6 million to £126.3 million.
The company maintained its guidance for a mid-single-digit organic revenue decline and does not anticipate market recovery in the second half of 2025.
The outlook for 2026 appears more challenging, with the company expressing caution about volume recovery despite signs of market stabilization.
Morgan also highlighted £7 million in start-up costs for new semiconductor facilities, which will impact underlying results despite being one-off in nature. These costs will be partially offset by £3 million in savings from business simplification initiatives.
The company expects its net debt to EBITDA ratio to improve to approximately 1.5x by the end of fiscal year 2025.
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