Downer EDI (DOW) H1 2026 earnings summary

Executive summary

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

• EBITA margin reached 4.6%, exceeding management targets, with all segments contributing to margin uplift.

• Interim dividend increased 19% to 12.9c per share, fully franked, with a 65% payout ratio.

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

• Portfolio simplification and divestments sharpened focus on core markets and enhanced earnings predictability.

Financial highlights

• Revenue declined 6.9% year-over-year to $4,860.7 million, mainly due to divestments and lower activity in some segments.

• Underlying EBITA increased 11.2% to $227.1 million, with margin up to 4.6% from 3.7%.

• Cash conversion was strong at 90.5%, exceeding the >90% target.

• Net debt to EBITDA improved to 0.8x from 1.3x, with interest coverage over 9x.

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

Outlook and guidance

• FY26 underlying revenue expected to be slightly lower than FY25 pro forma, with further EBITA margin improvement and NPATA of $295–315 million targeted, assuming stable market conditions.

• Management ambition for 4–5% revenue CAGR from FY26 to FY30 and EBITA margin towards 6% by FY30.

• Margin expansion and earnings growth expected in the second half, supported by seasonality and new contracts.

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