GNG’s 1H18 underlying EBITDA of $12.5m on $177.2m revenue was slightly ahead of our forecasts, although the Company has peeled back 2H expectations reducing revenue guidance to $270-300m (previously $300-330m). We would expect stronger margins in the 2H as more profit may be recognised at the back end of the soon to be concluded Mt Morgan and Dalgaranga projects. We believe investors can begin to look beyond customer disputes with EGS and WLF and focus on long-term growth prospects in an improving resources sector. Therefore, we maintain our BUY call on a $1.60 valuation.
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