Downer EDI (DOW) H1 2026 earnings summary

Executive summary

• Statutory NPAT rose 30% to AUD 98 million, with underlying NPATA up 7% to AUD 136.1 million and EBITA up 11.2% to AUD 227.1 million, reflecting improved contract delivery, margin expansion, and portfolio simplification.

• EBITDA margin reached 4.6%, the highest in over a decade, with all segments contributing to margin uplift.

• Interim dividend increased 19% to AUD 0.129 per share, fully franked, with a payout ratio of 65%.

• Work in hand grew 8.9% to AUD 38.2 billion, driven by strategic wins in energy, water, defence, and transport.

• Portfolio simplification and focus on higher-quality revenue have enhanced earnings predictability and reduced volatility.

Financial highlights

• Underlying revenue declined 3.6% year-over-year to AUD 4.9 billion, mainly due to lower Transport and Energy & Utilities revenue and divestments.

• Underlying EPS increased 10% to 18.7cps; cash conversion was strong at 90.5%, exceeding the >90% target.

• Statutory NPAT increased 30% to AUD 98 million; underlying NPATA up 7% to AUD 136 million.

• Operating cash flow (adjusted for interest and tax) was AUD 312 million, up 6.4% half-on-half.

• Free cash flow for the half was AUD 105 million.

Outlook and guidance

• FY26 underlying revenue expected to be slightly lower than FY25 pro forma, with further EBITA margin improvement targeted.

• NPATA guidance for FY26 is AUD 295–315 million, assuming stable economic and market conditions.

• Management targets underlying EPS CAGR of 9% from FY25 and revenue growth of 4–5% CAGR from FY26 to FY30.

• Margin expansion and earnings growth expected in the second half, with seasonality and ramp-up of new contracts supporting performance.

• Ongoing share buy-back program up to 5% of issued capital underway.