I would now like to hand the conference over to Mr. David Singleton, CEO and Managing Director. Please go ahead.
Good morning, everybody. This is David Singleton, and I'll be talking to you this morning. I'm also joined by David Bonomini, who's the Chief Financial Officer. Thanks to all of you for tuning in this morning. There's a lot of you on the call. I appreciate your time. I know it's a busy time of the year, and there are a lot of calls to go through. Thank you for joining us for the next 20 or 30 minutes. Austin's story over the last few years has been one of continued growth, both at the revenue line and also at the profit line. Once again, I'm pleased to be able to present a continuation of that growth story, much of which is testament to a lot of activity which has gone before this and has led to the result today.
Particularly today, I'm very pleased about two very strong stories: one around our Asia-Pacific business that includes Australia, of course, and the other one around the United States and Canada. The performance of our business in APAC has been particularly satisfying. Once again, it is moving towards becoming the cornerstone of the business both now and in the future. I'll talk about this a little bit later on, but we've done a lot of reorganization in the APAC region. For it to get to the strong profitability level that we've seen in this half, I think is very satisfying. I'd characterize the USA as a business that just continues to power on. That business has been improving by leaps and bounds over the last few years, and we've seen yet another outstanding performance of that business.
Despite some reorganization activities that they had to do because of potential tariff impositions in the U.S., that business has really powered on, hitting the ball out of the park, quite frankly, year after year, and has done it again this year. What we see is that the strategy that we put into place a few years ago, the Austin 2.0 strategy, continues to keep goals across the organization. I believe that that will continue into the future. I will ask you now, for those of you following us using your own packs, if you would move to slide three, which is headed Financial Results FY2025 first half. As you can see, revenue is up an extraordinary 18.5% to AUD 170.2 million. That includes a 52% increase in revenue in the United States from the prior corresponding period, but also increases in revenue both in APAC and in Chile.
Very strong revenue performance once again. Very much, I think, testament to the strength of the market that we're in, but also, very importantly, the strength of Austin in that market, both here in APAC and in the Americas as well. That's allowed us to continue to grow revenue period after period after period. Underlying EBIT is up 22% to AUD 25.3 million. Again, an outstanding performance, I think. It's slightly better than the 40%. If I go back to the end of last year, we said we expected around a 40/60 earnings split between first half and second half of this year. That was slightly better than that in this result. In all of that, the Asia-Pacific business has more than doubled its earnings from the prior corresponding period. As I said before, an outstanding performance.
The USA is up 35% on its prior corresponding period as well. It has been offset by a weaker performance in Chile as they start a brand new program and deal with the learning curve associated with that, a story that will benefit us, I am sure, over the coming years. Very strong underlying EBIT performance. Net debt is at AUD 10.5 million. Through our OSPI business, we have taken a very significant position in increasing steel stocks through the beginning of the year in order to make sure that we are adequately protected over the 12-month period, both from a pricing point of view where we saw some volatility, and from a supply point of view. OSPI has been a very important part of our business development over the last couple of years and remains very important.
$10.5 million of debt, but that is after a $21 million increase in steel stocks, which we expect to reduce significantly. I am sure David will talk about this, but we expect that to reduce significantly over the remaining six months of the year. I am particularly pleased by the order book, which once again is up, but up by a massive 22%, driven by the Americas, but also good performance around the rest of the business.
I think at the end of the—and certainly we repeated it at the AGM at the end of last year, and we repeated it at the AGM—I said, "Look, we were seeing very strong signals in the United States about the pipeline of orders, and that has definitely played out in the Americas." We did say that it would be a little bit weaker in Australia, and certainly in the first quarter, we saw that, but it came back very strongly in the second quarter, and we see that as being a stronger part of that business as we go into the second half. The pipeline into Australia and the United States, both very strong. Our confidence in the business has allowed us to increase the interim dividend to a fully franked AUD 0.006 per share, which is up 50% on the prior corresponding period.
We are reiterating the guidance that we gave at the AGM last year. I'd like now to move to slide four, if I can, to give you a little bit more color. This is titled FY25 H1 Highlights. It is page four in your packs if you're following us. The graph on the right shows the continuing performance of EBITDA in the business over the last several half-year periods. Compound annual growth rate of EBITDA has been 30% over that business, and of course, a strong performance in HY—sorry, in the first half of FY25. I think if you'd have taken me back to late 2021 when we kicked off the Austin 2.0 program, if you'd have offered me a 30% compound annual growth rate on our EBITDA back then, I would have been extremely pleased. It is very satisfying to see that that trend continues.
As I've said to you before, opportunities for that to continue into the future. I'll move now to slide five. The left-hand graph here, I will comment on. This is first half EBITDA margin % across the half years. Again, you can see an increasing trend as we have improved efficiency and capability inside the organization across all of the business units. I still maintain my belief that this business is capable of an 18% plus EBITDA margin. It's up to close to 15% in the first half, but dramatically improved over the last period of time. On the right-hand side, you can see our return on equity side. We haven't updated that from FY2024 because we haven't got a full year 2025 to go in there yet.
You can see that we continue to get good, strong return on equity from this business, which indicates that the investments that we're making in this business in order to manage the growth are relatively subdued compared to the increase in performance that we're getting, increase in EBITDA performance and cash flows that we're getting in the business. Okay. I'm going to hand you over to David Bonomini now, and we'll move on to, I think, slide eight. David Bonomini is Chief Financial Officer. He'll take you through in a bit more detail some of the results.
Thanks, David. Hello, everyone. I'm excited to share Austin's financial results with you today. I'm going to skip slide nine, given that David has covered the overall performance, and start with slide ten, discussing revenue. Group revenue, as illustrated by the graph, has shown a compound annual growth rate of 29% over the three years. The increase in revenue, as you can see from the graph, has moved from AUD 80 million in H1 FY2022 to AUD 170 million in H1 FY2025. The revenue growth to the half of 19% is driven by a strong order book. We have seen positive contributions from all business segments. The US was a standout with revenue increasing 52%. On the backdrop, as the US team commenced an expansion of their manufacturing capacity that involved the commissioning of a new facility, which will come online in full production in H2. It's a commence, really, now.
Expanding their workforce and reorganizing their supply chain to effectively position the business to deal with any tariff imposed on imported goods. Chile's revenue grew 8%. That involved the commencement of a multi-year OEM contract for truck bodies, and APAC saw revenue of 4%. It did start the year slowly due to some market uncertainty in the region, but recovered strongly in Q2. The strength of Q2 is expected to be maintained in the second half from a strengthening sales pipeline. The revenue growth overall has been driven by an installed base of recurring revenue, but it's pleasing that we're seeing new customers and increasing feature of the order book going forward. Turning to slide 11, EBITDA. The EBITDA growth was underpinned by Asia-Pac region as other sectors expanded their capacity. The EBITDA graph illustrates a compounding annual growth rate of 30% over three years.
That has seen EBITDA increase from AUD 11.6 million to AUD 25.6 million in HY25. The underlying EBITDA for the half was 22%, driven by APAC in the US. The APAC EBITDA margin doubled against the prior year, reaching 21%. The improvement was due to the benefits of the Indonesian labor costs and the manufacturing capability, as well as the material cost savings by OSPI. The region's marginal performance is expected to continue into the second half and has the opportunity to improve further. North America impressively grew by 35% while lifting their production capacity and transforming the supply chain logistics. The rapid expansion of the business impacted margins as the business relied on a higher use of contractors in H1. However, margins are expected to improve in H2 as the reliance on contractors reduces. Overall, the US business is well positioned for a solid second half performance.
South America's margins were affected by the mobilization of the OEM contract. It saw a rapid increase in volume and learning curve that led to labor productivity and steel consumption inefficiencies. The operations in Chile have stabilized, and we expect a return to profitability in H2. We're expecting a stronger EBITDA performance across the group in the second half. I'm going to now turn to slide 12, operating cash flow. The operating cash flow from continuing operations was an outflow of AUD 3.5 million. The outflow was primarily driven by the investment in working capital steel inventory of AUD 21 million. You can see that in the graph when you look at the working capital movement. The increase in the inventory was a result of the OSPI steel bulk purchase of steel. We leveraged their buying power to keep steel cost competitive across the region.
The steel inventory is expected to unwind in the second half, and we expect it to return to three to four turns per annum by the year end. Additionally, the operating cash flow was affected by a timing of the major customer payment of about AUD 10.2 million that was expected in December but was received in February. The second half is anticipated to see a significant improvement in operating cash flow with the unwinding of the OSPI inventory and the receipt of these customer advance payments. I'm going to now turn to slide 15, order book. The order book has been growing at an impressive compound annual growth rate of 28%. The first half, the order book is up 22% compared to the prior period.
The growth has been driven by the strategic focus on the sales and marketing, which has led to an expansion of the sales team across the group. We've seen improved responses to existing customers, and we have the capacity to pursue new customers. The business has also invested in training. It's heavily invested in improving the sales process, adding technology, CRM, and tools, etc., to help the sales team with responding to customers' demands. We've also added customer product support managers to support our customer base. The sales effort has seen us turn the second half with AUD 224 million in confirmed orders and a growing sales pipeline across the group. The order is particularly strong, showing an increase of 31% in the US. The order book is expected to continue to drive strong second half performance, and we're very excited about what H2 can offer.
That concludes my section. I'd like to thank you for the opportunity to share the financial results, and I'll now pass you back to David.
Okay. If we could move to, for those of you following us with your own packs, if we could move to slide 18, that is the sector analysis for APAC. As I said earlier, the APAC business is one that I find particularly satisfying. The amount of reorganization of that business has been more extensive than anywhere else, and we really started carrying that out in FY 2023. You can see that in the graph on the right-hand side where margin delivery in FY 2023 was at its low point, and then has continued to rise as we have completed that transformation program. This was very much a program of work around focusing our strategically important business in Indonesia, in Batam and Indonesia, to become a hub of manufacturing for the region and also for the world.
That's taken some time to get done, but is now working really well, and that business in Batam is now a very slick, very well-run, and very reliable business for the rest of the group. They're knocking out a truck tray pretty well every day now, day in, day out, in a very reliable fashion. In addition, the OSPI business has itself generated good margin improvement for the group because of its ability to significantly reduce the cost of our main cost outside of labor in our business, which is steel. We've seen a transformation really in the cost of steel for the group over the last couple of years as well, and we're seeing that come through.
For us to have achieved a 21% EBITDA margin in that business, I think, is a testament to all of that hard work and patience that we've had with that business over the last couple of years. Excitingly, though, there are still a couple of areas of softness inside that business, which gives us an opportunity to continue to grow and develop both the margin and the margin percentage over the next half or so. The market sentiment, as I indicated before in Asia-Pacific, at the beginning of the year felt a little bit cool. I think I used the expression previously that it felt like a bit of a chill running down St. George's Terrace here in Perth.
We certainly saw that in the first quarter, but things started to strengthen after that, and we've seen revenue was up 1.7 times in Q2 compared to Q1 in Australia. More importantly, as David alluded to, we've seen the order book pipeline really strengthen over the last several months. In fact, I would say now that the order book pipeline that we have ahead of us is probably the strongest. In fact, I think I could be quite clear, it's the strongest that I have seen in my four years as CEO of this business. It's a broader pipeline with more customers, with more interest than we have seen in all of that period of time.
A piece of evidence associated with that is that over the last nine months, 20% of the orders won have been with new customers or customers who have returned after several years of not being with us. That is a very important feature, as I may have said to many of you in the past, that typically these days when we secure a customer, the quality of our service, the quality of our product is such that we retain that customer over time. Because the nature of our product is that it has to be replaced continuously, that means we get a good recurring revenue stream from that. I think the performance of Asia-Pacific now is essentially a new normal. We do not have a lot of reorganization ahead of us now.
We've got a good stable business, and I think we can look forward to seeing a very strong business going forward. I described it previously as the business that will be the cornerstone of Austin going forward, and I thoroughly believe that to be the case. I'll move on now to the next slide. It's slide 19, which is the sector analysis for the United States. The U.S., which includes the U.S. and Canada, had an impressive increase in first-half profitability from AUD 7.2 million in the previous corresponding period to AUD 9.7 million, so that was up 35%. In what could have been a reasonably difficult year, given the amount of reorganization that we had to do, we identified, I think in about April last year, that there was a significant risk of tariffs having an impact on the business.
If what we now know today, the government of the United States was to get in, there's a real risk of tariffs and reciprocal tariffs around the United States. We were particularly concerned for two reasons, and that is because we had a supply chain of subassemblies coming out of Mexico into the United States that was helping us with capacity in particular, not so much from a cost point of view, but from a capacity point of view. Also, about 30% of our production goes out of the United States and into Canada, so a very material amount of the production into Canada. We sought to do two things. One was to stop supply out of Mexico, and we moved to eliminate that supply out of Mexico.
We still use Mexico for orders into that country and into Central America, but no longer into the United States. That was done several months ago. The next step, which was the bigger one, was to implement a Canada for Canada strategy, which really was to allow us to build subassemblies in Canada using partner companies and then to do final assembly of truck bodies close to the mine sites. Now, the second part of that, the close to the mine site production, was already in operation. We've been doing that for several years, but we haven't been building subassemblies in Canada. We have been through that process, and as we reported recently, we built in December last year and January this year, we built 10 subassembly kits for truck bodies going up into Canada, and we can now be self-sufficient in Canada for that operation.
That means that we're essentially fully protected from tariffs. The growth in the US, not only from a margin point of view, but also from a revenue point of view, up 52%, has meant that we needed to create more productive capacity in the United States, and I think we've done that very effectively. We were planning about 18 months ago to build a new facility in the US, but we just couldn't see how we could build that quickly enough and efficiently enough to be able to secure this dramatic growth in revenue. What we have done is to make some changes to our existing facility in the US and some upgrades in the US, which will be largely completed in the first half, but will be completed by in February or this month.
We have taken on a new lease facility in Casper that's given us a lot of additional capacity, which is coming online now. This business has achieved a big increase in revenue, a big increase in EBITDA, even given all of the changes that we have seen through the US in that period. They're particularly well-run businesses, and they've managed that transition very well. They move into a period of stable growth going forward. As David indicated, however, their order book is up very strongly corresponding period to corresponding period, and that will drive continued very strong growth into the second half of willing to FY2026 as well. I think what we're seeing there is a combination of two things.
Firstly, the new administration in the U.S. has created a sense of optimism in the industry, but also as we have grown our footprint in the U.S., our product has become increasingly accepted in that market and is being adopted more and more widely, both in the U.S. and in Canada, principally because of the very high return on investment performance improvement that it's seen over the OEM products. I'll move now to slide 20, and Chile. Chile has seen some revenue growth, more muted than perhaps we've seen in the U.S. As it moves into the multi-year program for an OEM, there's a lot of learning curve that has been dealt with in this first half as we try to get to grips with a new program. This is a very powerful program, though it has the opportunity to be running for many years.
It was originally conceived as an eight-year program, and all the signs are that that will continue that way. A lot of work going on in Chile to get them up to performance. In fact, the team that was so successful in Batam in getting the Batam facility up to its current high standard is now operating down in Chile to assist them as well. I think Chile is a part of our business to watch and see how it develops and improves over the next period of time. I'll move now to the last slide that I'm going to talk about today, and that's slide 27, which is outlook and guidance. Overall, I would say that demand worldwide remains very strong, and I'm buoyed by the fact that Australian demand has also come back very strongly.
That was a little bit of a concern a few months ago, but has indeed returned. It confirms the statements that we've made to you in the past that we build a replaceable and life product. When we get a large installed base as we have today, that pushes us through any weaknesses that there may be in the market. We're certainly seeing exactly that. I think we've got the best opportunity set in Australia that I have seen since I've been the CEO. We have a number of new customers coming on board, and when I look at the forward pipeline, I'm very excited that Australia has a very strong period ahead of it, strongly supported as it is by a great manufacturing organization that we have, not only in Australia but principally in Batam and Indonesia. USA, particularly strong and will stay strong.
Great management teams have managed that business really well. Strong tailwinds, I think, in the United States. They've got a broad exposure to a number of commodities, and the order book is testament to all of that. That all, of course, adds up to what has been a very strong order book improvement in this first half. Chile, which is exposed almost entirely to copper. The copper market seems to continue to develop. I noticed this morning an announcement by BHP Escondido of a $2 billion concentrator expansion program at Escondido, which is the closest copper mine, actually, to our facilities in Antofagasta. You can see that the miners have confidence in the copper story, and as a result, I think that will bring additional benefits to our business there.
Just remember, as we continue to increase the installed base and the number of customers across the organization of these life products, that means that this cycle of development should continue across all of the operating regions across the world. All of that leads us to be confident in being able to reiterate our guidance for FY2025. I think there are some, given the order book, I think there are some strong reasons to believe that there is an upward bias to the revenue for FY2025, and certainly seeing opportunities for that come through. Of course, we continue to confirm our underlying EBIT guidance of AUD 50 million for the full year, having overachieved the 40% of that that we said we would achieve in the first half.
Okay, that brings me to the end of the formal part of the proceedings, and I think we're going to move to Q&A now.
Thank you. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star two. If you are on a speakerphone, please pick up the handset to ask your question. Your first question today comes from Philip Pepe with Shaw and Partners. Please go ahead.
Good morning, David. Congratulations on what I thought was a good result. I still think it's a good result. Just want to ask a question on slide 16, which may have spooked some people. Significant amount of one-off, AUD 6.8 million, we'll call it AUD 6 million XFX. Some of those items look like they could have been capital expense as opposed to operationally expense, but more importantly, will any of those repeat in the second half or into FY2026, or are they genuine one-offs?
Yeah, I think just while David thinks about that, I'll just give you a couple of comments. I was asked this actually by somebody else this morning. We don't like to capitalize R&D expenses particularly, so we write those off as we go. We're just kind of continuing our process with that. ERP costs and the like, we just write off as we go, which I think is normal type of procedure. You could argue under different circumstances that some of those could have been capitalized. I'll let David talk to that as well.
Yeah. In terms of, I guess, Philip, in terms of the questions, I guess when I look at the list, the Chile expansion in support of OEM, there's a bit of flow effect into H2, but nothing what we saw initially on the mobilization of that contract. There will be some costs that will flow through to support that OEM expansion and capacity build in Chile. Equally with the US, a little bit so because of the finalization of the new facility, which has happened now. The first couple of months, there's probably some additional cost. Also, they're in a process of transitioning because they had to accelerate in such a rapid rate. They're in the process of converting that contract labor pool that they had in there to more direct employees.
We definitely are expecting a significant margin improvement out of that US business compared to what they did in H1, but it will be kind of incremental over the course of H2. In terms of the only other thing that we may look to do is we are always looking to kind of be more efficient at the center and across our business in terms of overheads. There may be further kind of restructuring costs that we incur in H2 as we kind of continue to look at that cost base.
How would the quantum compare to the AUD 6.8 million in the first half? Obviously, as you know, mining expert.
Sorry, Phil, we couldn't hear that comment.
I'll just say in terms of the dollar amount in the second half, how would the quantum compare to the first half?
I think it'd be significantly lower, Phil.
Thank you. If I can sneak one in more on the working capital, the inventory build that you said will reverse in the second half, has that begun and will it have fully reversed by 30 June or more so by 31 December?
We're expecting a significant reduction in the inventory build in the second half. That's simply because that steel that was bought and landed and put into the factories is being consumed right now. We've got a lot of production that will go through in the second half, and it'll be using that steel that we've got on the ground from that purchase. We'll see that. We're trying to aim for around three to four times inventory stock levels, about three or four times stock turns per annum. We're significantly above that at the moment, but we'll be closer to that level by the end of June. It'll release a lot of cash.
Excellent. Thank you. Well done again.
The next question comes from James Lennon with Petra Capital. Please go ahead.
Thanks, David, for taking my question. Just a quick one. I don't know if you've already mentioned this, but just keen to know with the Asia-Pacific segment, how did the QDA or the Australian-specific side of the business go in terms of margin performance?
It's hard to, we don't disaggregate the Australian QDA operations and operations in Mackay and Batam anymore, simply because they're so integrated. Orders taken in Australia, which are part built in the US, sorry, in Batam sometimes, and then finished in Australia or supported out of Australia. It is really difficult to make that assessment. What we do know is that what we can say is that the Batam business is a real gem now in the Australian company and is really driving a lot of that performance along with OSPI. There are a couple of areas in the business, as I alluded to before, which are not as strong as we would like them to be. We are setting about making some changes to improve that as well.
I think you should see that as an opportunity for continued growth in the margin growth in the APAC region.
Okay. Great. Thank you.
Once again, if you wish to ask a question, please press star one on your telephone and wait for your name to be announced. The next question comes from Patrick Moore with K&P Super. Please go ahead.
Thank you. I've got two matters to raise. The first is with the almost doubling of subcontract expenses. Have you changed the way you're doing your business?
Sorry, doubling of what? We've got a bad line now, Patrick.
Subcontract expenses have basically doubled over the half year.
Yeah, I could probably answer that question. That's really the contract costs really relate to the expansion that I talked about in the US and the Chile down in. Where we engaged, we had to engage, given the rapid growth, contract partners, contract labor to support that growth. The expectation is that that will rebalance that contract labor workforce in those regions in H2, whether we'll continue to improve it and rebalance it.
Thank you for that. The other matter is that although you give us guidance for EBIT, you also below the line, there's been a AUD 13 million turnaround in your foreign currency translation differences. That does confuse the tax situation significantly.
Sorry, just again, you got that? We're just—yeah, it's a bit funny.
Foreign currency translation differences. Sorry. Your foreign currency translation differences was a turnaround from AUD 8.7 million to AUD 4 million on the two halves. You give us the advice against EBIT, and yet those numbers are really pretty big.
Yeah. They're relating to the foreign currency translation reserve, where we've had the Australian dollar, we've got US loans, historic US loans predominantly into South America, and we've had a favorable variance with those against the Australian dollar to the functional currency. Those movements go to the foreign currency translation reserve.
Doesn't affect MPAT.
It doesn't affect MPAT, no, because they're unrealized movements.
I've seen that. Yeah. What's your expectation of the second half for that?
I mean, it's a difficult one to predict which way the currencies will go. Yeah, kind of not close to that to be able to really advise. It is really linked to the US dollar AUD movement.
I think, Patrick, because these are movements in, these are unrealized movements. They do not hit the P&L. They do not hit the cash flow. They just affect the balance sheet.
The carrying value of it, yeah.
Okay. Thank you.
The next question is from Marcus Barnard with Bell Potter. Please go ahead.
Yeah, morning. I’d echo the comments, good results, albeit with the cash movement. I suppose the question is on your working cap investment into steel. I think when I started looking at you, I was interested in your steel purchasing program, that you were buying steel centrally. I thought you might have an increase in working cap related to holding steel centrally and buying steel further in advance. Could you just go through what impact this has had? Can you just run through the sort of three to four times stock turn figure in a bit more detail as to how much of the increase in working cap is related to the increase in the business and how much is related to the central purchasing? Can you split that out? Thank you.
Yes. A couple of things, I think. We're still finessing the way that we work in OSPI. We've had an opportunity to improve our purchase rates in OSPI, and we've taken that opportunity and secured the risk of our order book going forward by the steel purchases that we've made. We've got a significant benefit as a result of all of that, or we will see a significant benefit as a result of all of that as we deploy that steel going forward. We do not plan to be holding steel stocks at this level going forward. I think this is a little bit of a one-off, and we will try to smooth that supply of steel going forward. We're certainly working on that in the business at the moment. I think about something like I'm just looking at the overall.
I think something like a quarter of that steel roughly was immediate growth. That would have been inventory that would have grown anyway, just because the business is growing. About three quarters of it was stocking up, taking the opportunity to stock up before production hits.
Yeah. The way we're kind of looking at that kind of working capital management is really kind of supporting or mirroring the top-line revenue growth. That is what we're targeting. As David said, there were some opportunities there that we took for, I guess, the investment in that steel in this half or this year that will unwind. Traditionally, going forward, our aim is to keep working capital tight to revenue growth as that grows. If anything, try to improve that as we go forward.
Can I follow up? Just fill us in on the can you give us an idea of how much you think you saved on steel purchasing as a result of your revised purchasing arrangements, either in percentage terms, or can you sort of quantify the dollar benefit so far?
Yeah. The reason we don't talk about that number is that it's very commercial and confident. It goes to the core of competitiveness for the business. I will say it's a significant contribution. It's a very significant contribution and very worthwhile in terms of the bulk procurement program. What we're doing is absolutely the right thing to do for the business. It's not only a profit thing, but it's a cash flow issue as well and improves the cash flow of the business in the medium term. What we have to do is just take some of this peak and trough out of the flow of inventory into the business. We have got some actions in place to do exactly that.
Yeah. I guess you probably wouldn't want to tell your supplier how much money you've made out of them. That probably wouldn't be helpful.
We wouldn't want to tell our competitors how much we're coming to steel.
Can you give us also an idea of how the steel price has moved since you bought that steel? Obviously, it's probably a tricky calculation if you didn't buy it all on one day. Are you looking at flat or a bit of stock profit or a bit of stock loss or did you not qualify?
No, no. We're finishing thing. No, no. We're seeing steel prices for quench and tempered steel, which is what this is. If you look at mild steel prices around the world, particularly out of Europe, have been dropping a bit because industrial production's been down. Quench and tempered steel, high-grade quench and tempered steel, which is a lot more expensive than mild steel, pricing of that has been slightly up over the last few months. I guess we've got a benefit in that because we've been shielded from that increase. That's the part of the benefit of holding the inventory.
In terms of the inventory, would you say a lot of it is going to the U.S. over your concerns over tariffs, or is it more generally across the business as you ramp up?
The majority of OSPI does not operate in the United States because quotas and tariffs over there prevent it from being able to have a major impact. It really covers APAC and Chile.
Okay. Thank you for those points. That's all I have.
Thanks, Marcus.
There are no further questions at this time. I'll now hand the call back to Mr. Singleton for closing remarks.
Okay. Thank you, everybody, for staying on the line during this call. Appreciate to see so many of you. I think the theme of this business over the last few years has been about growing the revenue base of the business, growing the margin of the business, and doing that through a sales regime that allows us to continue to grow the order book. All of those things have been very successful. They're the outcomes. The inputs to all of that have been the work that we have done both in APAC, which I've described, in making Batam a central part of our operations, getting OSPI up and running, and the work that we've done in the U.S., which has gone very well. I continue to be very pleased at the outcomes that we have seen from the inputs that we have made over the last few years.
As I said on the way through, the evidence for us is that the pipeline in all of the regions is probably the strongest. In fact, I think I've been more emphatic than that, it is the strongest I've seen in the four years that I've been here at Austin. I think that all augurs well for the future. Thanks, everybody.
That does conclude our conference for today. Thank you for participating. You may now disconnect your lines.