Firan Tech ((TSE:FTG)) has held its Q4 earnings call. Read on for the main highlights of the call.
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FTG’s earnings call for 2024 reflected a positive sentiment, underscoring a successful financial year marked by record revenue and significant EBITDA growth. The company’s adeptness in integrating acquisitions and securing crucial contracts contributed to its robust performance. Challenges such as margin compression, decreased Boeing deliveries, potential tariff impacts, and work stoppages were acknowledged, but the company remains optimistic about its strategic positioning and future growth prospects.
Record-Breaking Revenue and Growth
FTG celebrated a record-breaking year, with Q4 revenues hitting $45 million and full-year sales surpassing $162 million, up 20% from 2023. Total bookings soared to $184.5 million, marking a 25% increase, while the year-end backlog experienced a 26% rise.
Significant Increase in Adjusted EBITDA
The company reported a 33% increase in adjusted EBITDA, reaching $25.8 million, driven by enhanced sales volumes and operational efficiencies.
Notable Contract Win
FTG secured a substantial $17 million contract to supply cockpit interface assemblies for the COMAC C919 aircraft, with production scheduled from late 2024 through 2026.
Successful Integration of Acquisitions
Improvements in throughput, pricing, and cost savings were observed in the 2023 acquisitions, with Circuits Minnetonka achieving a notable 16% revenue growth.
Strong Performance in Aerospace and Circuits Segments
The company saw a 3% sales increase in the Aerospace segment and a 28% rise in the Circuits segment, fueled by both acquisitions and organic growth.
Margin Compression
FTG experienced a decline in gross margin to 27.3% from 29.1% in 2023, although operational efficiencies and favorable foreign exchange rates provided some relief.
Challenges in Boeing Deliveries
Boeing’s deliveries fell to under 350 planes in 2024 from approximately 500 in 2023, partly due to a safety incident and a machinists strike, impacting FTG’s results.
Potential Impact of US Tariffs
The potential imposition of US tariffs poses a risk to FTG, with around $55 million in sales to US customers originating from Canada or China.
Work Stoppage Impact
A six-week work stoppage at the Aerospace-Toronto facility early in the year adversely affected results, although subsequent recovery mitigated some of the impact.
Forward-Looking Guidance
Looking ahead, FTG remains optimistic about its growth trajectory, supported by strategic acquisitions and key contracts, such as the COMAC C919 deal. The company’s robust balance sheet, ongoing investments, and initiatives like the new facility in India and the FLYHT acquisition are expected to fuel long-term growth, aligning with the evolving dynamics of the aerospace market and major players like Airbus and Boeing.
In summary, FTG’s 2024 earnings call painted a picture of strong financial health and strategic foresight. Despite facing some operational challenges, the company’s record revenue, impressive EBITDA growth, and strategic initiatives position it well for future success. Investors and stakeholders can anticipate continued growth, driven by strategic acquisitions and market positioning.
