This article first appeared on GuruFocus .
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Revenue:$3.46 billion, broadly flat year on year.
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EBIT(A):Record $340 million, up 2% on FY25.
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EBIT(A) Margin:Improved to 9.8%.
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Underlying NPAT(A):Increased 8% to $192 million.
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Underlying EPS:Increased 7% to $0.205 per share.
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Free Cash Flow:$181.6 million on an adjusted basis, exceeding guidance.
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Net Debt:Reduced to $271 million.
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Leverage:0.4 times, with gearing at 12.8%.
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Dividend:Final dividend of $0.045 per share, bringing the total FY26 dividend to $0.0775 per share.
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Contract Mining Revenue:$2.4 billion, with EBIT(A) of $291 million.
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Drilling Services Revenue:$843 million, with record EBIT(A) of $85 million.
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Mining and Technology Services Revenue:$190 million, with EBIT(A) of $11 million.
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Depreciation Expense:Decreased by $23 million to 9% of revenue.
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Interest Expense:Reduced by 23% to $54 million.
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Effective Underlying Tax Rate:32.8% in FY26.
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Net Capital Expenditure:$321 million.
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Work in Hand:$6.2 billion at June 30, 2026.
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FY27 Guidance:Revenue of $3.45 billion to $3.65 billion and EBIT(A) of $335 million to $355 million.
Release Date: August 23, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Record EBIT(A) of $340 million, up 2% year-on-year, with margin improving to 9.8%.
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Fifth consecutive year of meeting guidance, demonstrating consistent execution.
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Strong balance sheet with leverage at 0.4x and gearing at 12.8%, the strongest in company history.
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Free cash flow of $182 million exceeded upgraded guidance, with 97% cash conversion.
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Drilling Services achieved record EBIT(A) of $85 million, with utilization expected to rise to mid-70s in FY27.
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Portfolio pivot to Australia and North America is gaining momentum, with 62% of revenue from Tier 1 jurisdictions.
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Record dividends declared, with total FY26 dividend of $0.0775 per share, up 7% EPS growth.
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Strong pipeline of $20 billion, with copper exposure nearly doubling to $6.6 billion.
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Divestment of BTP and AMS fleet sales expected to recycle $140-$155 million into higher-return opportunities.
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Safety improvements with zero fatalities and reduced injury frequency rates.
Negative Points
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Statutory NPAT significantly reduced due to $148 million in non-underlying adjustments, including $54.3 million in impairments.
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Revenue remained flat at $3.46 billion, impacted by project completions such as Botswana underground.
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Effective tax rate expected to increase to ~34% in FY27 due to repatriation of cash from asset sales.
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Drilling Services margins were dragged by mobilization costs and fuel-sensitive inputs in FY26.
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idoba-related impairments of $29.2 million and continued product development costs, though reduced, remain a drag.
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FY27 guidance implies flat to slightly lower EBIT(A) compared to FY26, with revenue growth expected only in H2.
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Capital expenditure is set to increase to ~$370 million in FY27, up from $321 million, for growth projects.
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The BTP divestment will result in a $64.4 million non-cash loss and a $5 million EBIT impact in FY27.
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Earnings remain heavily weighted to the second half, creating timing risk.
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African surface mining operations face localization pressures, leading to asset impairments and fleet sales.
Q & A Highlights
Q: What are the expectations for Contract Mining margins in FY27 as the portfolio pivots from West Africa to Australia and North America? A: Vanessa Torres (CEO) stated that while the pivot may lead to a slight decrease in margins, it would not be material. The focus is on capturing synergies between projects, such as the Goldrush and Fourmile projects now both owned by Nevada Gold Mines, to maintain margins as high as possible. Mike Ellis (CFO) added that the company remains committed to Africa for the right projects.
Q: Does the nationalization movement in West Africa pose a risk to the underground mining business, given its impact on surface mining? A: Vanessa Torres (CEO) explained that underground mining is very different from surface mining. The productivity and techniques Perenti brings are difficult to localize. While there is pressure to work in joint ventures, this has not reduced overall margins so far. She expressed confidence in the opportunities ahead, citing the company's long-standing presence and community work in Africa.
Q: Can you provide numbers on drill rig utilization and the outlook for the Drilling Services margin? A: Mike Ellis (CFO) reported that average utilization across the five brands in FY26 was approximately 70%, with expectations to reach the mid-70s in FY27. He noted that mobilization costs and fuel-sensitive inputs created a drag on margins in FY26, but these are expected to normalize, leading to a slight EBIT(A) margin increase in FY27 with increased revenue.
Q: What is the expected impact of idoba product development costs being included in underlying results for FY27? A: Vanessa Torres (CEO) stated that idoba's product has gone into beta, and the focus is on making it profitable. Development costs are expected to be less than $5 million in FY27, a reduction from the $7.6 million in FY26.
Q: Can you discuss the bigger opportunities in the $20 billion pipeline due for award in the first half of FY27 and the competitive landscape? A: Vanessa Torres (CEO) highlighted near-term negotiations for extensions at Geita in Tanzania and work with Newmont on Red Chris. She emphasized the focus on maintaining the 90%+ renewal rate for long-term contracts and capturing projects in North America as they move from early-stage to production, such as Red Chris.
Q: What is the impact of the BTP divestment on the FY27 guidance? A: Mike Ellis (CFO) clarified that while the discontinued note shows a $3 million EBIT impact for BTP in FY26, this is after divisional and corporate overheads. On a like-for-like basis, the impact on FY27 guidance is slightly above AUD 5 million.
Q: What is the expected effective tax rate for FY27, and why is it increasing? A: Mike Ellis (CFO) noted that the effective underlying tax rate was 32.8% in FY26 and is expected to increase slightly to circa 34% in FY27 due to the repatriation of cash from the AMS asset sales.
Q: What is the timing for the proceeds from the BTP sale and the AMS fleet sales? A: Vanessa Torres (CEO) detailed that the first tranche of the BTP sale ($80 million) is due at the end of October 2026, with the final $20 million due 12 months later. The $30-40 million from the Iduapriem fleet sale is due at contract conclusion in December 2026, and the additional $10-15 million from the idle AMS fleet in Ghana will be collected as the fleet is sold, with several buyers already expressing interest.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
