SBM reported a negative EBITDA of -A$39.8m and negative Earnings of -A$48.1m for 1HFY25. The negative EBITDA and Earnings results were broadly in line with our estimates as production challenges at Simberi resulted in negative operating cashflows in 2QFY25. In the short term, a new crusher sizer is now installed which should address mill throughput constraints and deliver an improved 3QFY25 production result. SBM’s key short-term catalyst will be a resolution to the current IRC tax assessment for which SBM has lodged an appeal earlier this week. We anticipate the tax assessment will be resolved within the next 6-months as the IRC Commissioner intends to prioritise a decision on the appeal. Our $1.00 Price Target with a Speculative Buy remains unchanged.
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