DGL GROUP LIMITED (DGL)
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03/03/2025

3

Hold

$0.48

29.73%

DGL Group's 1H25 earniings fell -14% year-on-year and below Bell Potter’s estimate.

Organic revenue growth (excl. E-Solutions) was around 8%, but higher operating costs from wage inflation, headcount increases, and shared services investments weighed on earnings, the analyst explains.

Environmental Solutions remained under pressure, with raw material competition reducing profitability to break-even, while Manufacturing underperformed sector peers despite industry-wide margin tailwinds.

Management anticipates cost reductions and process integration to drive improvement in 2H25 and FY26. Ag-chem volumes remain strong, while AdBlue prices normalise. The new Unanderra liquid waste facility is set to start production in 1H26.

Bell Potter lowers EPS forecasts by -25% for FY25, -20% for FY26. 

Hold rating maintained due to execution risks despite potential upside from operational improvements. Target price slips to 48c from 53c.

FORECAST
Bell Potter forecasts a full year FY25 dividend of 0.00 cents and EPS of 3.40 cents.
Bell Potter forecasts a full year FY26 dividend of 0.00 cents and EPS of 4.20 cents.

11/06/2025

3

Hold

$0.42

13.51%

Canaccord Genuity lowers its earnings forecasts for DGL Group following management's update guiding to FY25 earnings (EBITDA) of $50-54m and net profit of $5-7m.

Both projections are materially below consensus forecasts due to cost pressures in lead battery processing and site rationalisation, explains the broker.

While some manufacturing segments outperformed, the Environmental division continues to disappoint, with battery recycling margins under pressure and operations at Laverton shut down, observes the analyst. Cost relief is expected from ERP consolidation and facility closures.

Logistics and warehousing earnings were broadly in line with the broker's expectations, with benefits from site upgrades in NSW and Victoria expected to emerge in FY26.

The broker sees a stronger cost profile emerging in FY26 and beyond, aided by reduced overheads, ERP integration, and a new 240m-litre waste liquid plant set to open at Unanderra.

Canaccord Genuity lowers its target price to 42c from 51c and retains a Hold rating.

FORECAST
Canaccord Genuity forecasts a full year FY25 dividend of 0.00 cents and EPS of 2.10 cents.
Canaccord Genuity forecasts a full year FY26 dividend of 0.00 cents and EPS of 4.00 cents.