I would now like to hand the conference over to Mr. Sy van Dyk, Austin Engineering CEO and Managing Director. Please go ahead.
Good morning, everyone, and thank you for joining Austin Engineering's financial year 2026 first half results briefing. Together with me is Austin's Chief Financial Officer, David Bonomini. We will take you through the presentation released to the ASX this morning and then open for questions at the end. I will begin with an overview of the results and the key drivers for the half. David will then cover the financials in detail, and I will return to discuss regional performance, operational priorities, and our outlook for the second half. Before reviewing the results overview, please note the small graph on slide six showing our total workforce. We have adjusted our global workforce to match activity levels and improve efficiency significantly over the last six months. We reduced our workforce to 1,222 at December 25.
If you could please turn to slide seven for the results overview. I would like to point out that we are displaying our statutory results from continuous operations year and for material items, please refer to slide eight. Overall, the half has presented some challenges across the business, which we have previously flagged to the market and are reflected in the results here. The performance was disappointing and below what we can deliver as a team. While revenue was broadly stable, earnings were impacted by operational inefficiencies and contract-related margin pressure. Importantly, these issues are operational and within our control, not a reflection of customer long-term demand, market dynamics, or Austin's competitive position. We have pleasingly increased operating cash flow and generated free cash flow for the first six-month period, which has supported another dividend return to shareholders.
Group revenue for the half was marginally down 3% to just over AUD 170 million, but excluding the prior year restatement was broadly in line. North America has continued its growth trajectory, up 12% to over AUD 71 billion, off the back of strong demand for our product offering. This was offset by falls in APAC, down 12% to around AUD 70 million and 11% decline in the Chilean business to AUD 28 million. The lower out APAC revenue reflects some timing delays in trade orders from a major Australian-based customer and a softer East Coast market. Counter to this, market demand in Australia continues to be strong, with increasing production. Encouraging, an additional AUD 21 million of trade orders have been secured post half-year end. In South America, revenue was broadly in line with last year once you exclude the previous year's restatement.
Revenue was capped while we restructured the business to improve our efficiencies and cost control. Group EBITDA came in at AUD 8 million and EBIT at AUD 3 million, both down on the first half last year. This was driven by a loss in Chile of AUD 4.1 billion and margin declines in the U.S. and Indonesia, all of which we have made some changes to address, and I will talk about shortly. Australia made a solid contribution to profit, with improved margins on increased Bucket revenue. This has left the group reporting a modest statutory net profit after tax of AUD 2 million for the six-month period. Our operating cash flow was pleasingly AUD 6.6 million, an AUD 11 million turnaround from the AUD 4.4 million outflow in the first half last year.
This underpinned free cash generation of just over AUD 3 million after allowing for interest, tax, and CapEx. The positive cash flow and expectations of this continuing in the second half has supported the board's decision to declare an interim dividend of AUD 0.003 per share, fully franked. Importantly, I want to stress that the negative issues I have touched on are operational and within our control, not a reflection of underlying customer demand or the strength of our market position. Encouragingly, customer activity remains robust. Additional orders secured post period end, namely AUD 51 million, and strong Bucket demand in Australia support a stronger second half as operational improvements take effect. Please turn to slide nine, and I want to speak about our South American business and explain how we are overcoming some of the recent challenges we have faced in that division.
We took on a large OEM contract. It's now apparent that Chile business was ill-prepared to manage the substantial volume increase required, along with different manufacturing requirements of the OEM specifications. There was a range of labor and skill productivity issues encountered, and capacity actually became strained. In order to deliver the OEM contract, we shifted some of the production to Batam, which, while solving the immediate issue, simply spread the margin dilution to other areas. We have many of these issues in hand now. The OEM contract is being renegotiated. We will continue only if better pricing and terms are agreed, otherwise, it will end in April 2026 with no further orders accepted.
It is clear that the contract has played a major role in the poor operational performance of Chile, with contract performance resulting in a negative EBITDA of AUD 3.2 million in this reporting half. Of this amount, AUD 1.6 million is an onerous contract provision we made against the product produced, sitting in our work in progress at December 2025. Other main actions taken are: We have a new management team in place, supported by the American management team. We have worked hard to get control over our steel yard and processes to manage steel. We have reduced our direct headcounts and displaced underperforming subcontractors. We have put in place improved planning and scheduling, which will improve throughput in the facility and lower our cost base. Turning to slide 10 and North America. Here, we have had revenue basically triple over the last four years.
For this half, North America accounted for 42% of group revenue. This is a strong growth story, and demand remains strong. On the downside, however, the pace of growth has started to outstrip our ability to scale the operations constantly. We have seen profit margins fall as we have had to make greater use of contract labor and outsourcing to deliver on our orders. While we are not seeking to slow revenue growth, we are now putting significant emphasis on backfilling the necessary scaling of the business with an emphasis on workshop efficiencies. The slide details some of the specific initiatives, and I am pleased to say we are seeing progress in what we are now starting to measure. While room for further improvement exists, I'm confident we will see margins in North America return as these initiatives bear fruit.
I will now hand over to David to go through the results in more detail.
Thanks, Sy. Good morning, everyone. I would like to start with the group's profit and loss performance and then cover the results by region before moving to the cash flow and balance sheet. Turning to slide 12: financial performance. Group revenue for the half was AUD 170.3 million, down 3%, reflecting lower performance in APAC and Chile. The prior year, Chile misstatement, partly offset by the 12% growth in North America. EBITDA declined 63% to AUD 8 million. This was driven by the AUD 4.1 million loss in Chile, a AUD 4.6 million reduction in U.S. profit, and a AUD 3.1 million decline in APAC. Primarily due to operational inefficiency, the loss-making OEM contract and delays in major tray orders. Depreciation and amortization increased slightly, mainly from investments in the U.S. and APAC during FY 2025.
Tax expense reduction was mainly driven by the decline in the profit performance of Indonesia, U.S., and Chile, lowering the effective tax rate to 10%. Net profit after tax was AUD 2 million, down from AUD 13.4 million in the prior period. Turning to slide 13 and the revenue chart. Group revenue declined by AUD 5.2 million overall. APAC revenue fell 12% to AUD 70 million, largely due to the timing of the major tray orders and softer East Coast demand, partially offset by growth in the Australian Bucket sales. North American revenue increased 12% to AUD 71 million, continuing its strong growth trajectory. South America revenue declined by 11% to AUD 28 million, reflecting the capping of the OEM production, restructuring Chile, and the prior year misstatement. Turning to the EBITDA chart on the right.
APAC EBITDA was AUD 10.6 million, with stronger Australian Bucket performance more than offset by the Indonesian inefficiencies and the delayed tray orders. Indonesia entered the year with excess staff compared to the workload, which was addressed in October. Indonesia produced 15 trays for Chile to meet the OEM contractual requirements, which negatively impacted margins. North American EBITDA was AUD 4.2 million, down due to labor inefficiencies and increased use of external contractors and outsourced manufacturers. South America recorded a loss of AUD 4.1 million, driven by the operational inefficiencies, restructuring costs, and the loss-making OEM contract. Please note, we have taken an AUD 1.6 million onerous contract provision into account, as Sy mentioned earlier. While the first half performance was weaker year-on-year, APAC remains the largest contributor.
North America is expected to recover. Chile's performance is positioned to improve in FY 2026 with a new leadership team and the support of the U.S. team. Turning to slide 14: cash flow. The group closed the half with AUD 15.8 million in cash, compared to AUD 20 million last year. Free cash flow was AUD 3.1 million, a significant improvement on the prior year outflow of AUD 9.7 million, driven primarily by working capital improvements. The operational cash flow was just over AUD 9 million, including an approximate AUD 1 million in working capital inflow, compared to AUD 17 million outflow last year. CapEx was AUD 3.5 million, down AUD 2.6 million year-on-year. Financing activities included AUD 1 million borrowings, dividend of AUD 5.3 million, lease repayments of AUD 2.6 million, and a AUD 1.2 million share buyback.
Despite the lower EBITDA, the group delivered improved cash performance, lifting the free cash flow conversion close to 40% through tighter working capital management. Turning to slide 15, financial position. The balance sheet remains strong, with total assets of AUD 273 million and net assets of AUD 140 million. Net debt increased to AUD 18.2 million from AUD 12.8 million, reflecting working capital support to the U.S. and Chile, the payment of the dividend, and the share buyback. The net debt to equity ratio remains low at 11.5%. Working capital improvements included the inventory reducing by AUD 6.4 million through improved inventory management. Receivable decreasing by AUD 17.7 million, driven by the APAC collections. Payables decreased by AUD 16.5 million, mainly due to steel supply payments.
Customer advance payments declined by AUD 1.8 million due to delayed major customer orders, especially in the U.S. Overall, working capital increased marginally by AUD 0.7 million, with further improvements identified across the group. Thank you for your time, and I'll now pass you back to Sy.
Thanks, Dave. I'll move on to provide an update on the performance of our global regions. I'll move on to slide 17. First, Asia Pacific. APAC has continued to its position as the cornerstone of profitability for the group. Despite some softening in revenue, down 12% to AUD 70.6 million. Trade sales were down just over AUD 20 million, with the late timing in orders I mentioned earlier. Along with an East Coast softening, pleasingly, an additional AUD 21 million in trade orders have been secured post-half year. Market demand, on the other hand, has been robust. We saw a AUD 40 million revenue uplift and have entered the second half with a stronger order book. Australia's performance was offset by lower production and efficiency challenges in Indonesia, impacted by order deferrals and the Batam facility stepping in to fulfill the OEM production requirements out of Chile.
This resulted in overall EBITDA and margins for APAC being lower compared to the prior corresponding period. Coming out of this, we have implemented changes in Indonesia, right-sizing the business to align with current demand, and a keen focus on improving manufacturing efficiency and stability. With an improvement anticipated in the second half and a strong momentum in Australia, Austin expects a return to both revenue and earnings growth for the APAC division. On to slide 18. As I mentioned upfront, the U.S. business has continued its revenue growth, up 12% to over AUD 71 billion, contributing 42% of Austin's total revenue. I've covered already the plans we are executing to improve operational leverage by improving workshop productivity, increasing production flow, and reducing dependency on external subcontractors. Primarily, this is via investment in workforce capability and de-bottlenecking our Casper facility.
Order levels in the first half were lower due to timing, with a stronger order cycle expected in half two. Underlying customer activity remains robust. The region is positioned to benefit from improved efficiency and increased in-house production capability. Turning to slide 19. In South America, the lower revenue was principally driven by the production restructure stemming from the OEM contract I mentioned earlier and the restatement we did in the prior period. Margins were also significantly pressured by this contract. Operational inefficiencies and some restructuring costs, resulting in a AUD 4.1 million EBITDA loss for the half. This includes the AUD 1.6 million onerous contract provision we took. Chile is firmly in recovery mode, with a new general manager and a refreshed leadership team having implemented change, including the initiatives I've outlined.
We are seeing tangible results and expect a return to revenue growth and profitability commencing in the second half. Please turn now to slide 21, our strategy on a page. Our strategy continues to provide a robust foundation for sustained success. I remain dedicated to advancing our strategic priorities, which are anchored in three operational pillars: product leadership, customer focus, and manufacturing excellence. On the product leadership, we continue to design and engineer products that meet the changing needs of our customers for productivity, efficiency, and sustainability gains. On the customer focus, we continue to build our sales and marketing programs and ensure we are constantly improving our service to customers throughout the life of our products. In manufacturing excellence, we remain focused on ensuring centralized operational systems are in place across the company, and training the team to increase productivity for Austin.
Value for our customers and reduce waste within our operations. On to the final slide on page 26, guidance for the full year. We are revising our revenue guidance to greater than AUD 350 million, and our statutory EBITDA, excluding FX movements, to between AUD 14 million and AUD 16 million. We delivered a statutory EBITDA of AUD 3 million in the first half, this calls for an EBITDA of between AUD 11 million-AUD 13 million in the second half of FY 2026. We do not foresee the material items repeating in the second half to the quantum listed in the first half. I further discussed the improvements we are undertaking in Chile and the U.S. to improve operational performance and how we are working on de-bottlenecking our facilities to reduce reliance on subcontractors.
We have rightsized the business during the first half, reducing our employee numbers significantly, mostly across Indonesia and Chile. We are renegotiating the Chile OEM contract, or we will not accept new orders post fulfilling our current obligations. With these actions, we aim to deliver on an improved second half financial year 2026. I'll hand it back to the operator. David and I are now happy to take any questions you might have.
Thank you. If you wish to ask a question via the phones, please press star one on your telephone and wait for your name to be announced. If you wish to ask a question via the webcast, please type your question into the Ask a Question box. Your first question comes from James Lennon with Petra Capital. Please go ahead.
Oh, good day, Sy and David. Looks like it's been a busy period. Just a couple of questions from me. You mentioned there that the competitive position, you know, hasn't really changed for you guys. Just wondering, you know, what's happening in terms of pricing of product. I think, you know, you previously had sort of mentioned you might have had a pricing advantage, given the efficiencies you were getting out of Indonesia, but that looks like it's sort of changed. Can you just give an update on, you know, why you think your competitive position is still intact?
Yeah. Okay. Is that the only question, James, or did you have more?
I'd also be keen to know, just like Buckets is, you know, obviously a great result. You know, is there visibility into next half as to whether you continue to see that sort of gains, or is it sort of difficult to know? I guess finally, just, you know, around the timing of, you know, the improvement in these controllables that you see, you know, what sort of timing are you giving to getting margins back to sort of where they need to be?
I mean, as I said, the market and the market dynamics and our competitive position really hasn't changed. That really hasn't had any impact on pricing across the region. We do have, you know, we do have, if you look at, obviously, well, if you're probably referring to the Batam facilities, more specifically in your first comment, which supports the APAC region and pretty much everything out of the Americas, which is obviously serviced by American operations. That is still, you know, it's still performing well. I mean, this half, you know, Batam probably hasn't performed well, and it is because we entered into the period with a lot more people than what the business activity required.
If you look at our accounts in a lot more detail, you'll see that, you know, the main item that has changed year-on-year is our labor cost and our subcontractor costs, and that is just because of inefficiencies, but also we had a lot more people than what the business activity called for. And that we needed to restructure the business, which we've done, and that's resulted in that reduction. As to the positioning of that facility, and its lower cost base, that is no doubt true. What we need to work on to be full transparent, we need to also increase our operational effectiveness in Chile. Whilst labor is cheap, it needs to improve its efficiency, to ensure it is optimized out of that facility.
When I say it needs to improve its efficiency, it needs to improve the time it takes to build a body, and we are working hard on putting those efficiencies in place as well. That hasn't changed. I mean, as to the question regarding Buckets. You know, I mean, for those of you that have been invested in the story for a while, you probably would have known a few years ago, the Australian business unit that pivoted from making trays and Buckets to only Buckets, and we moved all tray manufacturing for the APAC region into Indonesia.
That business unit was in a very bad position, was losing money, quite a bit of money. The team has worked really well through great initiatives that they've implemented to turn that business around from a loss-making situation to now a profit-making situation. They've got really their business under great cost and efficiency control. That has resulted in us being able to put more through our workshops and also to improve effectively our competitive pricing position, which has helped in that sense. As I've said, we're entering the second half with a strong order book in Buckets. We see that continuing both on the East Coast and on the West Coast. We've got both an operation, obviously, in Mackay and down Perth. As the timing of the recoveries, that's baking.
Yes, we are in the process of recovery. As you can see from those charts, you know, in North America, we are seeing, you know, now that we're measuring it, we're seeing the productivities improving month in, month out. Now, that is due to a lot of work that we're doing, flow manufacturing that we're putting in, body systems that we're putting in. You know, some of them are basic, and some of them are more complex. We also did bottlenecking the facility as there is, you know, there is a capacity constraint in one of our final assembly bays, so we are, you know, gonna use our second bay and do a different manufacturing technique to actually ensure we can actually increase our throughput.
That's all, a lot of it's already in the making, and some of it still needs to be baked through. I'm confident we've got a very capable management team in North America by the results, and I understand that might sound counterintuitive, but they are very experienced. They know their problems, and they'll fix it. In Chile, you know, we've seen. You've seen those photos there on the steel yard, so we've got steel under control right now. We have right-sized the business. We've decreased our direct labor quite considerably. We have moved our subcontractors that work for us in our facility there. We've displaced some of them that have been really poor performers. The biggest challenge in Chile is that OEM contract is really hurting us. It's hurting us twofold.
It's a lot more complicated to make. We're losing money. It's slowing down throughput. It's not allowing us to backfill that with more profitable work from other clients. The mine in South America is really robust.
Great. All right. That's good. I appreciate that. Just getting back to that competitive advantage, it's not like you're having to turn away work, it's, you know, the right sizing of the business means you're still gonna be able to deliver, you know, ultimately getting revenues back to where they were. It's just that you're now gonna be able to do it more efficiently once the sort of systems and flow production gets sort of set.
Correct.
Okay. Thank you.
Thank you. Your next question comes from Michael Besley with ATB. If my memory serves me correctly, you said on a prior call that you had moved key managers from the U.S. to Chile to improve productivity. Was this a driver in the fall in U.S. productivity? If so, do you think now you have the right people in place across all your operations?
Yeah, thanks for the question, and I, and I can see where that comes from. No, so if you, w hat we have done is we've, the business used to be run out of Perth, with a, with the CEO and the chief operating officer, and the chief operating officer looked after all regions. That was very complicated for multiple reasons. Firstly, a timing issue that, you know, basically a 12 hour-16 hour time difference. What I've done is I've elevated a guy called Max Flores, that used to run the American business, to the VP of Americas, which is effectively the chief operating officer for the Americas. He oversees North America, and he oversees Chile, and he can speak Spanish. The big challenge we have from Perth is no doubt in where we work.
Spanish, they speak Spanish, and their English is poor, and our, and obviously our Spanish is either poor or non-existent. The whole aim was to put the North American or Chile business under North America so that Max can oversee that. He can speak to the Chilean, so he can speak Chilean, and he can actually direct and put in the processes that we already have or implementing in the U.S. across Chile very quickly. We're also using. If you look at what we're using out of North America, we're using their steel, what we call their steel nesting expertise. When we take steel plate and we actually nest that, so we cut that up, it was one of the issues that I saw in Chile that wasn't optimized. There was excessive steel wastage.
Now that is processed out of North America, it's a use of one resource in the North American team to oversee that workload. We're using some of the North American sales expertise just to oversee the sales team in Chile, 'cause they are all relatively new to us then. We wanna ensure that the sales concepts that we deploy everywhere else in the world is deployed into South America, and that is explaining our total cost of ownership model to a client rather than just trying to compete on price. Because there are, there are cheaper manufacturers in Chile than us, but clients come to us because of the quality we deliver, plus the total cost of ownership over the life cycle of that body. Hopefully that addresses your question.
Thank you. Your next question comes from Patrick Moore, Private investor. You've had the Chile problem for some time. How long do you expect your Chile improvement plan will take to sort out the problems? In the meantime, what drain will that be on your management and financial resources?
Thanks for the question. The biggest challenge in Chile, as I said, is the OEM contract that actually, you know, we've got orders and we've accepted orders a while back that will be completed by April of 2026. Some of those sales that we'll see in the first half, we've made it under contract provision four in the first half. We are in renegotiations with that OEM contract, OEM provider, to renegotiate that contract at significant improved rates. I'm not sure if I'm allowed to say this, but I'm quietly confident we'll get to that point. We'll make obviously an ASX announcement when we get there.
The alternative is that we walk away from the contract, and then we go after higher work where we can actually make better margin on. When I say that, this is the OEM body is totally different to our body. The way you put it together is totally different to the way we put our body together. To make it quite simplistic, it is a lot more complicated. It takes a lot more hours to stitch together, and therefore it slows down the throughput we have in the facility. If we either increase our rates, make good margins through that work, it's great work, it's consistent work, so that's the great part of it. The bad part of it is we're not making margin.
If we don't make that, we'll just displace that with other work, and I'll either bring in new work or we'll rightsize the business for the workload. We have quite a substantial amount of subcontractors in Chile that we use, so it's easy to scale the business up and down in Chile rather than just focusing on our own staff in Chile. Yes, the whole plan is that by the end of this half, we should be back up to improved margins out of Chile by the actions we've taken. Yeah, I'm confident that that will be the case.
Thank you. Your next question comes from Oliver Porter with Euroz Hartleys. Hi, Sy and David. Can you please give an indication of the normalizations that were included in the prior underlying AUD 30 million-AUD 40 million EBIT guidance? Can you confirm the updated range is statutory ex FX?
Yeah. I guess the previous... Sorry, are you asking about the underlying? The underlying guidance was obviously underlying, and we didn't provide a framework for the normalizations included in that underlying. I think that the range was AUD 30 million-AUD 34 million, if I can recall correctly, that we provided to the market. Yes, the updated guidance range, because we're presenting our results in statutory, and the underlyings were a little bit messy last year, I decided to provide an underlying guidance for EBITDA just to make it clearer and easier for people to understand without having to worry about the normalizations.
Thank you. Your next question comes from Guy Moore. What are the plans for refinancing or otherwise managing the debt due over the next 12 months?
Yeah, thanks for the question. Our plan is to refinance the debt. It's due to expire in November of this financial year, and we'll work with our financiers to extend that ideally for another two years.
Thank you. Your next question comes from Chris Wippl with Argonaut. Prior FY 2026 revenue guidance was built on input from your regional GMs. Is there revised lower guidance because pipeline expectations have been lost to competitors, shifted to the right, or canceled? Has there been a change in customer behavior or demand?
No. I guess we actually have lowered, you're right, we have lowered our revenue guidance. It is provided. The process I've implemented in the business is that we actually run with quarterly reforecasting after effectively the quarter has ended, which takes a bit of time from the central office to obviously prosecute, review, and review with those teams. The main driver for the decrease, and I'm gonna probably explain, the main reason why we are calling down our revenue compared to the previous revenue is mostly from North America. There was an expectation that a lot of our product goes into the oil sands into Canada. One of our larger clients that we had 42 bodies with an on order last year.
We expected a repeat order to come through this year. That order hasn't come through yet. The reason being is that that client actually has invested in AUD 510 million of new trucks. What they have done is they've diverted all their capital to pay for those trucks, obviously, and they've put on ice all other capital. The maintenance teams had to then resubmit requests into their management team for body replacements. We had that client gave us 22 bodies in 2024, 42 bodies in 2025, and we've got zero now that we expected to come through. Even if those orders come through right now, just for what we've got in play, it's gonna be hard to put that through the facility to meet the June reporting period.
We and the team collectively are still confident that client will place orders with us. Timing is gonna be against us for this half.
Thank you. Your next question comes from James Vanasek with VN Capital Management. What is your anticipated CapEx for second half of FY 2026? Do you anticipate free cash flow increasing from AUD 3.1 million in the first half to maintain the AUD 6.5 million of dividends and share buybacks?
In terms of the capital expenditure in the second half, we believe it'll be and forecasting to be broadly in line with the first half. No material change there. In terms of free cash flow, we achieved close to 40% cash flow conversion. We expect that to improve in the second half with the lift in profits and continued working capital management. We're expecting around a 45%-50% conversion rate on a free cash flow basis. In terms of the dividends and share buyback, that's at this stage, there has been no change in relation to those. They're still, you know, subject to obviously board approval, et cetera. If cashflow and the cashflow continues and is strong, the expectation is, we'll be able to maintain our dividends.
Thank you. Your next question comes from Michael Mennel. Why has revenue fallen in the APAC region? Australia, especially WA, is experiencing a huge boom in all types of mining, with gold leading the way. Are competitors taking market share away from us in trade orders? It is definitely concerning to shareholders, and what is ANG doing about this?
Yeah. Well, we are not, I mean. Let me answer. From a market share perspective, we haven't lost market share in Australia, but we haven't gained market share in Australia. We have a very strong competitor in town, and, you know, they have a fair share of the market share in Australia and always has had that market share in Australia. The question as to why the APAC revenues is fallen, this is not only Australia. If you look at APAC, it obviously includes the Indonesian business unit, it includes the worldwide business unit.
In the first half of this year, where we normally have a fair amount of work going into Indonesia, to a specific loyal client of Austin, and this is not truck orders, this is not Bucket orders, it's an ancillary underground product, that we manufacture. They postponed all orders, and we've communicated that to the market, right to the second half, because they had a major event on site, and I think that's well published in the marketplace. That's one of the regions. The East Coast market, the coal market is definitely under stress. I think everybody is reading the newspapers regarding companies in the coal sector that are struggling. The royalty rates are incredibly high on these companies and, you know, they are documenting and not me.
Their costs are under pressure and that is a reflection on what we are seeing, that they are therefore containing some of their capital. In Western Australia, to answer your question directly, we've got one major client here. That client does not buy the same amount of bodies year in, year out. They actually do displace, you know, that goes up and down, year in, year out, so it's not a straight line across the board. Gold's going really strong, gold is also a lot in the underground space, we are a company that is more exposed to bulk commodities.
When I talk bulk commodities, they are the ones that actually drag, grab all the truck fleets that with only a handful of clients, and those handful of clients have got big trucks with big bodies that need our bespoke body that optimize payload and also the Buckets and the loading tools that are associated with loading those trucks and trays. Gold, as I said, great news. Yes, it is a driver of revenue, we do sell, gold is mostly underground. It is not surface driven. Whilst we do sell underground product, their product sort of displacement cycle is not the same as an open-cut mine.
Thank you. Your next question comes from Michael Besley. Do we assume the share buyback has been canceled?
Not at all. It's still active.
Thank you. Your next question comes from Michael Mennel. Have we lost any important customers in Chile or Australia? In August, you told us that old customers were returning to Austin.
Yeah, I mean, in Chile, we have just won a major client. I won't name his name. For the first time, ever, we have got an order from a client there. This is a major mining house, worldwide mining house that we have claimed. One of our biggest, and I'll talk and go, the biggest copper mine in Chile is a very long-term, loyal client to Austin. We are actually got a mine site service agreement where we actually maintain the bodies for them on site. For this six months, no bodies were replaced at that site. We expect quite a few to be just replaced in the second half. No, we have not lost any business in Chile itself.
The issue that I have in Chile is that there is incredible amount of work in South America, not just in Chile. There's work in actually Peru. Brazil is another target for us, and we don't do any work in Brazil, but we have had clients inquiries out of that region. How we service that is something we'll all figure out, but we haven't lost any work in Chile per se.
Thank you. Your next question comes from Chin Chan. When can we expect Chile to be profitable again?
My expectation is that Chile will turn to profitability later in the fourth quarter of this year.
Thank you. Your next question comes from Reese Vander Maiden. Would it have been better to, instead of paying a small dividend, use that money to either reduce debt or buy back shares?
It is a fair point. We have... I mean, look, the directors on the company always wrestle with how we play the capital allocation going forward. I guess there are quite a few of our shareholders that continually ask us for dividends. We've got a fair franking balance, therefore we actually have decided to pay a small, effectively a small dividend. This dividend is gonna cost us AUD 2 million once declared. It's not a significant dividend, and it's well within our capacity to do so. Our debt levels are relatively low compared to, you know, I mean, if you look at our debt levels, I think it's 11%. We are well within our debt covenants, and we're expecting credit cash flows to continue.
That's the reason why we paid a dividend.
Thank you. Your next question comes from Michael Mennel. To what extent are we using robotics to produce trays?
Yeah. Michael, at this stage, we probably are on the, in relatively, in my view, in the starting blocks of using robotics to build trays. We are using what they call Gecko, Bug-O, et cetera. That is effectively, I would say the one-on-one of going down an automation route. It's just a way to do long welds in a more consistent way. We then have cobot, and the only place where we've got cobot is in North America. We've got two cobot in North America. And they, one does effectively beveling for us, and the other one just does welding the eyes on a truck bed for us. There is no doubt a lot of movement we can do in this space.
We do have a robot, a fully-fledged robot in Perth that isn't being utilized. It's all my plans that we go down this avenue quite consistently. I've charged the company. We've created teams to explore how we use automation to lower our cost base. You know, we're in the starting blocks of that journey.
Thank you. There are no further questions at this time. I'll now hand back to the conference to Mr. van Dyk for any closing remarks.
Yes. Thanks again for everyone for taking the time to join us this morning, Paul, and for your interest in Austin. We do appreciate it, and I know it's a very busy period. On that note, thank you for your time, and I'll wish you a great day today.
Thank you. That does conclude our conference for today. Thank you for participating. You may now disconnect.