This article first appeared on GuruFocus .
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Revenue:Record revenue of $6.5 billion for FY 2026.
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Underlying EBITDA:Record underlying EBITDA of $2.6 billion.
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Underlying NPAT:$822 million, compared with a loss in FY25.
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Iron Ore EBITDA:$1 billion, the largest contributor.
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Mining Services EBITDA:Record underlying EBITDA of $976 million, up 32% on FY25.
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Lithium EBITDA:$771 million, reflecting improved operational performance and stronger prices.
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Operating Cash Flow:$2.6 billion (excluding Onslow Iron carry loan and Iron Ore pre-payment), representing 102% cash conversion on underlying EBITDA.
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Free Cash Flow:$849 million after capital expenditure of $1.1 billion.
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Net Debt:Reduced by around $1.1 billion to $4.3 billion.
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Net Debt-to-EBITDA:Fell from 5.9 times to 1.7 times at year end.
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Liquidity:More than doubled to $2.4 billion, comprising $1.6 billion in cash and an undrawn $800 million revolving-credit facility.
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Dividend:Fully franked dividend of $0.83 per share, representing a 20% pay-out on underlying profit.
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FY27 CapEx Guidance:$1.425 billion pre-financing or $1.27 billion on a net-financing basis.
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Sustaining CapEx:$815 million for FY27.
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Wodgina Sales-Volume Guidance (FY27):360 million to 390 million tons of SC6, an increase of 14% to 23%.
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Wodgina FOB Cost Guidance (FY27):Around $640 to $710 a ton, a decrease of 4% to 13%.
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FY27 Mining Services Production Volumes Guidance:370 million to 390 million tons, a 9% to 14% increase on last year's record.
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Release Date: August 27, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Record FY26 results with revenue of $6.5 billion and underlying EBITDA of $2.6 billion, marking the strongest financial year in company history.
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Strong balance sheet improvement with net debt reduced by $1.1 billion to $4.3 billion and leverage down from 5.9x to 1.7x, driven by organic cash flow.
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Mining Services delivered record EBITDA of $976 million, up 32%, with a high-quality, long-term contracted order book (70% over 15+ years) that is less exposed to commodity cycles.
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Lithium operations improved significantly, with Wodgina's FY27 sales volume guidance up 14-23% and FOB costs down 4-13%, positioning the company to capitalize on higher prices.
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Return to shareholder returns with a fully franked dividend of $0.83 per share, reflecting confidence in the balance sheet and a clear capital allocation framework.
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Onslow Iron is running beyond nameplate with new transhippers, and the company is exploring expansion opportunities, including a potential Train 4 at Wodgina and brownfield growth projects.
Negative Points
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FY27 CapEx guidance is elevated at $1.425 billion (gross), with sustaining capital of $815 million reflecting one-offs like elevated stripping at Mount Marion and fleet replacements.
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Onslow Iron FOB costs are expected to rise to $56/ton in FY27 from $52/ton, driven by cost escalation and higher diesel price assumptions.
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Mining Services margins are under pressure, with the company acknowledging it is 'getting tougher' to maintain the $2/ton margin as commissioning benefits wash out.
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The POSCO transaction, which will reduce ownership in Wodgina and Mount Marion to 35%, is still pending regulatory approvals, creating uncertainty and a discount to Street NAV.
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Pilbara Iron Ore (Central Pilbara) remains marginal in cash generation at current iron ore prices, with limited levers to improve economics if prices decline further.
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Autonomous road-train project at Onslow is progressing slower than expected, with full driverless deployment not yet achieved and cost savings of $60-70 million/year not yet realized.
Q & A Highlights
Q: How should we think about the dividend policy and the balance sheet framework going forward, given the return to dividends? A: Mark Wilson (CFO) explained that the dividend policy is grounded in the capital-allocation framework, prioritizing balance-sheet strength first. The declared dividend of $0.83 per share represents a 20% payout of underlying NPAT, which is considered a prudent distribution given growth opportunities. The Board will contemplate dividends when there is line of sight to leverage being below 2 times within a 12- to 18-month window, with a franking credit balance of $913 million available.
Q: What is the outlook for Mining Services volumes and the opportunity for external growth? A: Mark Wilson (CFO) stated that FY26 results are just the start of the significant opportunity for Mining Services. The company sees a good pipeline of opportunities, largely external, with some driven by higher strip at Mount Marion through FY27. Chris Ellison (MD) added that they are always on the lookout for new opportunities, both in Australia and offshore, and hope to announce new developments over the next period.
Q: Can you provide details on the potential Train 4 expansion at Wodgina and its timeline? A: Darren Killeen (COO) noted that the Train 4 expansion is at an early stage, with design progressing through FY27. The company is evaluating two paths: a commision upgrade for $180 million to $220 million and Train 4 for $230 million to $260 million, with some MPI upgrades also needed. Once the study is complete and FID is made, production is approximately 18 months away.
Q: What are the levers to improve cash generation at the Pilbara Iron Ore operations if prices decline, and when would you consider shutting it down? A: Darren Killeen (COO) responded that Mining Services is an integral part of the Central Pilbara story, and the contribution is not reflected in the headline FOB costs. The company has line of sight for the next five years at Lamb Creek, which remains the focus, and this is a priority in forward planning.
Q: What is the status of the autonomous road-train project at Onslow, and what will be the cost impact? A: Malcolm Bundey (Chairman) stated that the project is progressing well, with trucks currently operating with caretaker drivers. The goal is to have fully driverless trucks by the first quarter of next year, with cost savings of approximately $60 million to $70 million annually. The primary objective is to remove humans from the haul road to eliminate injury risk, though this is a world-first endeavor requiring a slow and careful approach.
Q: How should we think about the FY27 CapEx guidance, particularly regarding the ownership assumptions for Wodgina and Mount Marion? A: Mark Wilson (CFO) clarified that the CapEx guidance of $1,270 million net and $1,425 million gross is based on a 50% ownership of the Lithium assets. If adjusted to the post-POSCO 40% level, the net figure would decrease by $95 million to under $1,200 million. He also noted that strip at Marion could be up to 50% higher than the life-of-mine average, with a significant portion being capitalized.
Q: What are the company's priorities for growth, particularly regarding copper and international expansion? A: Chris Ellison (MD) stated that copper is high on the agenda, with a focus on partnering with owners of near shovel-ready projects where MinRes can leverage its design-engineering-build capability. The company is also looking to replicate its model in another geographical region over the next 12 to 18 months. In Lithium, the focus remains on brownfield projects with low CapEx and quick returns.
Q: Can you provide an update on the Bald Hill restart and its future outlook? A: Darren Killeen (COO) confirmed that Bald Hill is on track to reach nameplate capacity of 140,000 tons SC6 equivalent in the December quarter. Further drilling is needed to improve resource confidence and prove up a reserve before providing long-term guidance. The current focus is on achieving the 140-kiloton run rate.
Q: What is driving the increase in Onslow Iron's FOB cost guidance to $56 per ton in FY27? A: Mark Wilson (CFO) attributed the increase to year-on-year escalation, with most of the cost coming through the Mining Services life-of-mine contract. Chris Ellison (MD) added that diesel price assumptions have been set at $1.25 per liter for the full year, which may be slightly conservative given recent price trends.
Q: How does the Board balance accretive growth opportunities against returning capital to shareholders? A: Malcolm Bundey (Chairman) explained that the company has strengthened its balance sheet and reduced debt costs, positioning it to take advantage of opportunities. Growth opportunities are medium to long-tail, with spending spread over 12 to 24 months. The Board will monitor opportunities on an opportunistic basis while rewarding shareholders, as demonstrated by the current dividend.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
