Profits tumble at Gupta’s InfraBuild in September quarter
Profits for the September quarter at Sanjeev Gupta’s InfraBuild steel distribution business in Australia have more than halved compared with a year ago because of falling margins and a slowdown in demand.
The profit slide is outlined in a 533-page document to prospective bondholders for a $US350 million ($550 million) raising by InfraBuild, one of the better performing businesses in Mr Gupta’s global empire of steel and industrial companies in Europe, the United States and Australia.
Sanjeev Gupta acquired the InfraBuild business in 2017 when he also bought the Whyalla steelworks. Ben Searcy
InfraBuild said it expects adjusted EBITDA for the three months ended September 30 to decrease to a range between $136 million and $146 million, and profit after tax to decrease to between $25 million and $35 million. This compares with adjusted EBITDA of $208 million and profit after tax of $87 million for the three months ended September 2022.
InfraBuild, which Mr Gupta acquired when he purchased the assets of the collapsed former BHP subsidiary Arrium in 2017, has been a bright spot in the GFG Alliance, which has a global workforce of 35,000 people.
InfraBuild runs two electric arc furnaces in Sydney and Melbourne, 10 manufacturing mills on the eastern seaboard and a network of steel distribution sites and recycling operations and has 4878 employees.
It reported a 16 per cent drop in net profit after tax of $239.6 million in the 12 months to the end of June and revenues of $5.69 billion, down 5 per cent on the previous year. But in a segment in the bond offer memorandum titled “Recent Developments”, the company said its “unaudited preliminary” financial information for the three months ended September 30 showed that profits had
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