Magontec (ASX:MGL) Highlights Changes At A Return To Statutory Profit For Nine Months On Higher Magnesium Alloy And Anode Sales

Aditi Sarkar

29 October 2026 04:01 PM AEDT

Magontec (ASX:MGL) Highlights Changes At A Return To Statutory Profit For Nine Months On Higher Magnesium Alloy And Anode Sales

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Highlights

Magontec (ASX:MGL) has released unaudited management accounts for the nine months to 30 September 2026.
Earnings before interest, tax, depreciation and amortisation, excluding unrealised foreign exchange, were $3.2 million, against a loss of $1.5 million.
Net profit excluding unrealised foreign exchange was $0.2 million, and $1.6 million when significant items are also excluded.
The report shows costs for the strategic review but does not say how it will conclude.

Magontec (ASX:MGL) has released unaudited management accounts for the nine months to 30 September 2026. The business reports revenue of $59.4 million, up from $46.1 million a year earlier, and a statutory profit after tax of $1.3 million, compared with a loss of $3.9 million in the prior corresponding period.

The Business

Magontec has two divisions. Cathodic Corrosion Protection (CCP) makes magnesium anodes in Romania and China, and electronic anodes in Germany, which protect water tanks in heating and HVAC appliances. The Metals division supplies magnesium alloys and special metals, mainly for aerospace, to customers in Europe and North America, and runs recycling operations in Germany and Romania.

Earnings

Gross profit rose to $12.8 million from $9.3 million. The Metals division contributed $2.4 million, against a small loss a year earlier, and CCP contributed $10.4 million, up from $9.7 million. Third-quarter gross profit was $4.3 million.

Earnings before interest, tax, depreciation and amortisation, excluding unrealised foreign exchange, were $3.2 million, against a loss of $1.5 million. Net profit excluding unrealised foreign exchange was $0.2 million, and $1.6 million when significant items are also excluded. Statutory profit before tax was $2.6 million, helped by a $1.1 million foreign exchange gain, compared with a $1.7 million loss in the prior period.

Significant items totalled $1.4 million. They include $0.6 million of costs for the company's strategic review, a transfer pricing audit and provision, a non-cash incentive plan accrual, and redundancy and closure costs in China. The report shows costs for the strategic review but does not say how it will conclude.

Segment Drivers

In CCP, revenue rose and electronic anode revenue grew in constant currency, which the company links to heat pump adoption and a new product range. European magnesium anode gross profit also improved. China remains challenging, and management has cut back to more profitable lines.

Metals revenue rose strongly. The business states alloy volumes to Europe and the United States increased, including more trading of primary magnesium, and that special metals grew faster than expected.

Cash And Balance Sheet

Underlying operating cash flow was $3.4 million, but a $3.5 million working capital outflow, mainly inventory and receivables, left net operating cash flow at an outflow of $0.2 million. Closing cash was $7.8 million. Bank borrowings were $9.2 million, all classed as current, giving net debt of $1.4 million, compared with net cash a year earlier. Net assets were $45.2 million.

Debt maturities matter here. The Commerzbank facility in Germany, with $7.8 million drawn, matures on 30 November 2026, and the report gives no renewal details. The Romanian UniCredit facility matures on 31 August 2027. A Chinese facility is undrawn and being renewed.

The report gives market information at 30 September 2026 of 57.9 million shares on issue and a company-stated share price of 22.5 cents.

Outlook

Management commentary, which is not formal guidance, expects electronic anode sales in the fourth quarter to be similar to the nine-month level, European anode volumes and margins to hold into the first half of 2027, and China to remain short of volume. Recycling volumes are expected to stay lower as the European auto industry declines, while special metals should stay buoyant through year-end. The company is separating CCP and Metals into distinct management structures, with Metals efficiency measures expected to show results in 2027.

Risks And Milestones

The report does not disclose order book figures or a date for the next report. The dated items it identifies are the Commerzbank maturity on 30 November 2026 and the UniCredit maturity on 31 August 2027, along with the renewal of the Chinese facility.

FAQs

Q: What is the principal development covered in this update?

A: Magontec has released unaudited management accounts for the nine months to 30 September 2026. The business reports revenue of $59.4 million, up from $46.1 million a year earlier, and a statutory profit after tax of $1.3 million, compared with a loss of $3.9 million in the prior corresponding period.

Q: What should readers watch next?

A: The report does not disclose order book figures or a date for the next report.

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