Perenti Ltd.

Overview Key strengths Key risks One of Australia's largest underground mining services operators, with a modestly diversified service offering. Exposure to loss of business during commodity downcycles, with a concentration in gold. Record of conforming with prudent financial policies. Capital-intensive business with potentially volatile free cash flow. Sizable contract book with counterparty diversity. Material exposure to high-risk jurisdictions, including West Africa. Under our base-case forecast, we project the company's ratio of gross adjusted debt to EBITDA will be about 1.5x in fiscal 2025 and 1.0x in fiscal 2026. This reflects our view that the company's portfolio of mining contracts will continue to deliver growth in cash flow as it benefits from prior capital expenditure (capex) investments. In our assessment, Perenti

...We expect Perenti's credit metrics will continue to improve in fiscals 2025 (ending June 30, 2025) and 2026. Under our base-case forecast, we project the company's ratio of gross adjusted debt to EBITDA will be about 1.5x in fiscal 2025 and 1.0x in fiscal 2026. This reflects our view that the company's portfolio of mining contracts will continue to deliver growth in cash flow as it benefits from prior capital expenditure (capex) investments. In our assessment, Perenti has evolved to largely self-fund a base line capex level of about 10% of revenue, even though it remains an inherently capital-intensive business. This will help the company maintain moderate growth in revenue and earnings. Hence, we expect Perenti to...

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