This article first appeared on GuruFocus .
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Revenue:$4.3 billion, up 31.4% on FY25.
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Underlying EBITDA:$288.6 million, up 38.8% year on year.
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Underlying NPAT:Up 43.6%.
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Cash Holdings:$319.7 million.
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Cash Conversion:94%, up from 83% last year.
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Order Book:$7.5 billion.
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Pipeline:$29.8 billion, with active tenders of $11.1 billion.
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Final Dividend:$0.145 per share, up 53% on FY25.
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Mining Revenue:$1.54 billion, roughly flat year on year.
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Mining Earnings:$139.9 million, up 15.6% year on year.
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MET Revenue:$1.26 billion, up 35.1%.
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MET Earnings:$96 million, up 40.5%.
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Fredon Revenue:$684.2 million for the nine months since acquisition.
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Fredon Earnings:$36.1 million, at a margin of 5.3%.
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Capital Expenditure:$146 million, marginally below last year.
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FY27 Revenue Guidance:$4.6 billion to $4.8 billion.
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FY27 Underlying EBITDA Guidance:$320 million to $330 million.
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Release Date: August 20, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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NRW Holdings Ltd ( ASX:NWH ) delivered a strong financial performance with revenue up 31.4% to $4.3 billion and underlying EBITDA up 38.8% to $288.6 million.
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The acquisition of Fredon has exceeded expectations, contributing $684.2 million in revenue and $36.1 million in earnings in its first nine months, with a strong pipeline of opportunities in data centers, health, and defense.
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The company maintains a robust order book of $7.5 billion and a record pipeline of $29.8 billion, with active tenders of $11.1 billion, positioning it well for future growth.
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Cash conversion improved to 94%, with strong cash holdings of $319.7 million, and the successful refinancing of bank facilities increased liquidity to $700 million with better terms.
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All divisions delivered earnings growth, with MET revenue up 35.1% and earnings up 40.5%, and mining earnings up 15.6% despite flat revenue, supported by strong operational performance.
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The company increased its final dividend by 53% to $0.145 per share, reflecting confidence in its financial position and outlook.
Negative Points
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The civil division's revenue growth was modest, impacted by a one-off challenging contract in Queensland that weighed on first-half margins, though second-half margins improved.
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The effective tax rate returned to a normal level of 29%, up from 14% in FY25, which could impact future net earnings.
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The company wrote off $90 million of the OneSteel receivable, which, while providing a tax saving, highlights a significant historical impairment.
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Capital expenditure discipline has led to a decrease in property, plant, and equipment, which may limit the company's ability to take on new projects without additional capital investment.
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The mining division faces potential margin pressure from client-supplied equipment projects like Meandu, which typically carry lower margins, and the company is cautious about capital allocation for new mining opportunities.
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The MET division's revenue growth may be constrained by the roll-off of the Fimiston project, with management expecting only flat to modest growth in the near term.
Q & A Highlights
Q: Can you provide more color on the MET division's outlook for FY27, particularly regarding the roll-off of the Fimiston project? A: Jules Pemberton (CEO) stated that MET will certainly grow its bottom line, with a worst-case scenario of flat to growing revenue. The opportunities in live tenders are described as "enormous" and unprecedented for the business, which bodes well for the division's future.
Q: What is the rationale behind increasing the banking facilities by $300 million, given the existing undrawn capacity? A: Peter Bryant (CFO) explained that the refinancing was part of an assessment of the group's overall treasury structure. The goal was to secure a significant working capital buffer and, more importantly, to have the capacity to act quickly and efficiently on potential M&A transactions.
Q: What is the company's current thinking on M&A, and in which areas or capabilities would it consider expanding? A: Jules Pemberton (CEO) indicated that while many opportunities come to them, the company maintains strict discipline on capital allocation and strategic value. They are interested in growing the MET maintenance business and expanding Fredon or EMIT. He noted a recent example where they withdrew from a process due to value concerns, highlighting their disciplined approach.
Q: What is the expected CapEx for the year ahead? A: Peter Bryant (CFO) guided that CapEx for FY27 should be around $165 million, up from $147 million in FY26. Jules Pemberton (CEO) added that the new Meandu project is client-funded CapEx, allowing them to add revenue without a significant capital obligation for the company.
Q: Can you elaborate on the growth drivers within the MET division, aside from the larger Primero projects? A: Jules Pemberton (CEO) highlighted that DIAB (shutdown maintenance) and RCR (products, parts, and service) are growing strongly with good margins. As the lower-margin Fimiston work rolls off, there is significant potential to improve the bottom line even if revenue growth moderates.
Q: What are the key pockets of strength within the MET pipeline? A: Jules Pemberton (CEO) noted that the gold sector has an enormous amount of activity in plant upgrades and new builds. The energy sector is also active, along with iron ore. Gold represents a decent portion of short-to-medium-term opportunities.
Q: What is the expected growth trajectory for the Fredon business, and how much capacity does it have without additional acquisitions? A: Jules Pemberton (CEO) stated that the business has significant capacity and that previous assumptions of 20%-plus growth are likely "undercooked." Peter Bryant (CFO) added that the margin has stepped up considerably in the second half, and the team is targeting a 6% margin run-rate by the end of FY27.
Q: Are there opportunities for the civil division in the upcoming public infrastructure work in Western Australia, such as Anketell Road and the Kwinana Port terminal? A: Jules Pemberton (CEO) confirmed involvement in those projects. He noted that while public infrastructure work in WA had almost gone to zero, it is now ramping up again alongside strong iron ore activity. This provides a good balance for the business, with margins expected to improve in FY27.
Q: Can you elaborate on the $4.2 billion of active tenders in the mining division, including the commodities and timing of potential awards? A: Jules Pemberton (CEO) indicated that news flow could come within the next six months. The company has spare fleet capacity to take on more work without a large CapEx bill. He also noted that the drill and blast business is expected to perform much better than it has in the last two years.
Q: Can you clarify the growth rate for Fredon, and what are the biggest end-market opportunities you are seeing? A: Peter Bryant (CFO) clarified that the company has been guiding for Fredon to achieve $1 billion in revenue in FY27. Jules Pemberton (CEO) added that the biggest opportunities are currently in data centers, followed by health and AV (audio-visual) related to the Brisbane Olympics, with a good runway for the next few years.
Q: What should we expect for mining margins into FY27, given the new Meandu project and the 9.1% margin delivered in FY26? A: Jules Pemberton (CEO) stated that the typical margin range is between 9% and 11%, depending on capital intensity. While client-supplied equipment projects like Meandu typically have lower margins, the annual run-rate for that job is around $150 million, and there may be opportunities to supply equipment to improve margins.
Q: What is the status of the major mining contract renewals, such as Curragh and Karara? A: Jules Pemberton (CEO) confirmed that both Curragh and Karara are in discussions, with nothing to suggest they won't be renewed. He expects business as usual. The company is also seeing busy bid activity in gold and iron ore but will maintain discipline on capital allocation.
Q: Is the aspiration to reach $1 billion in revenue for the civil division still realistic for FY27, and where can margins potentially get to? A: Jules Pemberton (CEO) stated that hitting a specific revenue target is not a desperate focus; improving profitability is more important. He believes margins can improve from the current 6.5% towards 7%, but noted the challenges of managing a large business with varying project timings and overheads.
Q: How are competitive dynamics and pricing power across the business, given the high level of activity in the market? A: Jules Pemberton (CEO) stated that the market is very busy, which is good for contractors. In the MET market, competitors are "absolutely full," leaving NRW in a strong position to secure good outcomes. The company is not doing "anything stupidly" to win work and maintains strict discipline on pricing and capital allocation.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
