Industrial services provider Babylon Pump and Power (ASX:BPP) more than doubled its quarterly operating cashflow to around $2 million over the three months to the end of December.

The $12.5 million market capitalisation company attributes the positive cashflow to its ‘strategic initiatives’ implemented over the first half of the 2024 financial year, which saw half-yearly revenue rise by 64% year-on-year to $22.4 million.

This helped drive a half-year earnings before interest, tax, depreciation, and amortisation (EBITDA) result of $3 million and a net profit after tax of around $200,000.

With around $2.7 million of funding left in the bank and another $6.9 million in receivables due from Babylon’s client base, the company says it plans to continue to focus on expanding its water management capabilities and lowering its carbon output by adding new lower-emission evaporators to its rental fleet.

Babylon’s December quarter cashflow was marked by $13.1 million in quarterly cash receipts, and the company says it’s the 7th quarter of positive cashflow of the last 8, with all 4 quarters of the 2023 calendar year ending positive.

However, while the $2 million positive cashflow result is a sturdy increase on the $830,000 result from the September quarter and the $450,000 result from the June quarter, it still falls short of the $2.41 million in positive cashflow posted by Babylon over the January quarter of 2023.

Nevertheless, Managing Director Michael Shelby says over the past 6 months, the Babylon team has managed to accelerate earnings in both the rental and maintenance segments of the company as it worked through its business strategy.

“I take pride in our organisation’s commitment to our clients while simultaneously continuing to improve our cashflow and our bottom line.” 

“I take pride in our organisation’s commitment to our clients while simultaneously continuing to improve our cashflow and our bottom line”

Babylon Pump and Power specialises in water management through its pumping equipment and power generation equipment rental arms, as well as through its installation and maintenance services arms.

The company says its December quarter result was driven by improved earnings across both its rental and maintenance business segments, and part of its strategy going forward is to continue to add assets to its fleet, with internal asset building taking preference over new asset purchases.

Through this strategy, the company has been able to grow its pumping rental fleet at a lower-cost basis than if it purchased new assets.

Shares in Babylon Pump and Power were up 20% to $0.006 at 1:00pm AEDT on 30 January 2024.

Write to Joshua Smith at Mining.com.au

Images: Babylon Pump and Power