Downer EDI (DOW) H2 2026 earnings summary

Executive summary

• Achieved margin-led earnings growth, with EBITA margin reaching 5.1% and statutory NPAT up 51%, reflecting a more resilient, higher-quality portfolio and operational discipline.

• Portfolio resilience supported by $38.5bn work-in-hand (+10% YoY), with $12.2bn secured during FY26 and robust risk management.

• Enhanced shareholder value through disciplined capital allocation, a share buy-back program, and a 17% increase in fully franked dividends.

• Strong cash generation and disciplined capital allocation supported ongoing investment and shareholder returns.

• Safety remains a priority, with improvements in injury frequency rates but tempered by a workplace fatality.

Financial highlights

• Underlying EBITA increased 6.1% to $502.9 million, margin up to 5.1% from 4.4%, exceeding management targets.

• Statutory NPAT rose 51.2% to $225.4 million; underlying NPATA up 10% to $306.7 million.

• Revenue declined 4.6% YoY to $10.9bn (2.8% decline ex-FX), mainly due to Energy & Utilities consolidation and lower Telco volumes.

• Cash conversion at 91.1%, exceeding the >90% target; net debt to EBITDA improved to 0.8x.

• Total dividend increased 17% to 29.2cps, fully franked, with a payout ratio of 65%.

Outlook and guidance

• Targeting underlying EPS CAGR of 9% from FY25 to FY28, 4–5% revenue CAGR through FY30, and EBITA margin expansion towards 6% by FY30.

• FY27 guidance: revenue and earnings growth with EBITA margin improvement, but 1H27 expected to be lower due to contract ramp-ups and project phasing; 2H27 expected to see return to growth.

• Positive medium-term outlook supported by strong market positions in energy transition, data centres, defence, and transport infrastructure.