NRW (ASX:NWH) executives highlighted strong first-half FY2026 performance, a higher interim dividend, and an upgraded full-year earnings outlook during the company’s half-year results call led by CEO Jules Pemberton and CFO Peter Bryant.
Half-year results: revenue up nearly 20%, EBITDA up more than 36%
Pemberton described the period as an “exceptional set of results,” particularly compared with the prior corresponding period. For the first half, NRW reported revenue up 19.5% to AUD 2.0 billion. Underlying EBITDA rose 36.5% to AUD 132.3 million, while underlying NPAT increased 42.3% to AUD 83.1 million. Underlying earnings per share were AUD 0.181.
NRW said its order book stood at AUD 7.5 billion and noted growth in near-term opportunity sets, with a pipeline of AUD 25.2 billion (projects expected to be tendered or awarded within 12 months) and AUD 9.2 billion in active tenders submitted.
Guidance upgraded; management cites strong trading and normalizing weather
Management upgraded FY2026 guidance, lifting expected underlying EBITDA to AUD 275 million to AUD 285 million, up from the AUD 260 million to AUD 265 million range disclosed at the AGM. Full-year revenue guidance was reiterated at AUD 4.1 billion to AUD 4.2 billion.
In Q&A, executives said January performance was “where we wanted it to be.” When asked about weather impacts early in the second half, Pemberton said there had been some rain in January but “nothing out of the ordinary,” contrasting it with what he called last year’s “exceptional rain event” that lasted much of the year. He said a cyclone caused minimal disruption at Carrara (around half a day lost), and he described conditions as “dry as a bone” at the time of the call.
While first-half cash conversion was above typical levels, Bryant cautioned it was helped by recovery of older debtor balances and some early invoice payments from a major client. He said the company expects cash conversion to revert toward long-term averages (targeting high 80s to high 90s percentage range over time).
Fredon acquisition: earn-out achieved; accounting treatment adds complexity
Bryant devoted part of his remarks to the accounting and balance sheet effects of NRW’s acquisition of Fredon (now reported within the EMIT segment). He reiterated that the deal had been announced as up to AUD 200 million consideration (AUD 140 million guaranteed plus up to AUD 60 million earn-out), with AUD 18 million deferred for two years.
He said Fredon achieved its earn-out, meaning NRW expects to pay the maximum AUD 200 million consideration. However, he noted accounting standards require the AUD 18 million deferred amount to be treated as an employee expense due to retention conditions tied to minority shareholders. That amount will be provided through the P&L and disclosed as non-underlying.
On the purchase accounting, Bryant said the company will book customer-related intangibles of AUD 95.3 million and goodwill of AUD 141.7 million related to the acquisition.
He also outlined how additional cash in the acquired business affected cash outlay. While NRW announced a AUD 200 million purchase price, Bryant said the company “effectively paid AUD 191.3 million” on a like-for-like basis due to additional cash that came across at completion. He said the final cash outlay was AUD 154 million after accounting for cash and adjustments described on the slide.
On leverage and liquidity, Bryant said net debt increased to AUD 200.4 million, with leverage at 22.1 (before AASB 16). He said gearing was better than expected due to strong cash at the half, but added NRW still expects to pay the AUD 60 million earn-out-related payment, which could lift gearing in the second half before closing the year at or below 30%.
Segment performance: civil impacted by one contract; mining margin back to 9%; MET strong; EMIT integrating
Pemberton said NRW is “not really a true mining services business anymore,” emphasizing diversification across public infrastructure, buildings, data and defense, alongside mining.
- Civil: Revenue increased 6.3%, supported by urban growth and Western Australia activity, including sustaining capital work for Rio Tinto. Queensland’s core civil revenue was flat and affected by an underperforming contract, with productivity and rain issues. Pemberton said expected outcomes from that contract have been fully priced into the half and it is due to complete soon.
- Mining: Pemberton characterized the half as a “great result,” with margins back to around 9%, aligning with management’s stated 9%–11% EBIT margin range. Revenue was down versus the prior corresponding period due to completed projects (including Mount Catlin, Mount Webber, and Isaac Downs). He said NRW expects a stronger second half as Castle Hill accelerates and as South Walker Creek volumes increase under a new contract model that moved to a production-based structure starting in January.
- MET: Management cited an “exceptional performance,” with revenue up about 30% on the prior corresponding period and improved margins, driven by DIAB and RCR performance and strong Primero revenue from the Fimiston project, which management said is completing toward the end of the half. Executives stated there was no profit release or similar one-off benefit in MET results. They said they were comfortable about replacing Fimiston revenues given tender activity and the group’s pipeline, and noted the division has meaningful maintenance and shutdown work that provides more recurring earnings.
- EMIT (Fredon): The newly acquired business delivered AUD 208 million of revenue at an EBITDA margin of 4.6%, which Pemberton said was as expected based on due diligence. He said integration of approximately 2,500 employees and systems had gone smoothly, and management aims to lift performance toward an internal target of a 6% EBIT margin over time, with improvement expected “pretty quickly.”
Other themes: safety metrics, capital discipline, technology optionality, and Whyalla recovery efforts
On sustainability, Pemberton said NRW’s TRIFR improved to 5.1 from 6 previously, and said critical risk management implementation was close to complete across the group, with rollout to Fredon following the acquisition. He attributed decreases in female and Indigenous participation metrics to Fredon’s inclusion and an increase in the predominantly male blue-collar workforce, while stating the company intends to improve those statistics.
Capital discipline was another recurring theme. Bryant reported half-year capex of AUD 56.2 million and said full-year capex guidance remains about AUD 140 million, though he expects the company to come in “a little below” that level. Pemberton also described a strict approach to equipment spending in mining, emphasizing a preference for capital-light or client-equipment contract models when returns do not justify major investment.
In MET, Pemberton said NRW had begun discussions with global investment banks about “next steps” to generate value and potentially commercialize its lithium processing technology, which he said has been developed over several years and tested through a third pilot plant. He framed the initiative as early-stage, with potential pathways including sale, joint venture, licensing, or operating its own facility, while stressing that the company is still working to determine the best approach and value.
Separately, a shareholder asked about the company’s efforts to recover amounts related to Whyalla. Pemberton said NRW had been “scuppered” in attempts to recover funds and referenced legislative changes affecting an attempt to take ownership of the port. He said the company had wound up an entity tied to shares in Tarmor but that the asset was subsequently placed into administration. He said NRW is continuing efforts without allowing it to become a distraction, and suggested recovery could depend on a sale process, though timing and outcomes remain uncertain.
About NRW (ASX:NWH)
NRW Holdings Limited, through its subsidiaries, provides diversified contract services to the resources and infrastructure sectors in Australia. The company operates through three segments: Civil; Mining; and Minerals, Energy & Technologies. The Civil segment delivers private and public civil infrastructure, mine development, bulk earthworks, and commercial and residential subdivision projects. Its civil construction projects include roads, bridges, tailings storage facilities, rail formations, ports, renewable energy projects, water infrastructure, and concrete installations.
