Downer EDI Limited reported a 10% increase in underlying net profit after tax to AUD 306.7 million for the fiscal year ended June 30, 2026, though revenue fell 4.6% year-over-year to AUD 9.9 billion due to foreign exchange translation impacts.
Statutory net profit after tax surged 51% to AUD 225.4 million, while underlying earnings before interest, tax, depreciation and amortization rose 6% to AUD 502.9 million. The company’s EBITA margin expanded to 5.1% from 4.4% in FY2025 and 3.2% in FY2024, exceeding its target of greater than 4.5% across the two-year period. Cash conversion reached 91%, surpassing the 90% threshold.
Revenue declined 3.3% in the Transport segment to AUD 5.2 billion, primarily due to a AUD 135 million foreign exchange headwind in New Zealand. The Energy & Utilities division saw a 10.9% drop in revenue to AUD 2.5 billion, while Facilities reported a modest 1.8% decrease to AUD 2.1 billion. Despite revenue pressures, EBITA margins improved across Energy & Utilities and Transport, reflecting operational efficiencies. The Facilities segment’s margin contracted slightly to 6.8%.
Total work-in-hand rose 10% to AUD 38.5 billion, with 90% of the order book government-related and 93% services-based. The company secured AUD 12.2 billion in new contracts during FY2026, including a AUD 3.05 billion Defense Property & Asset Services contract, NZD 1.5 billion in New Zealand Transport Agency projects, and a AUD 500 million facilities management contract with Stockland. The addressable market across Downer’s core segments is estimated at AUD 127 billion annually.
Management highlighted a data center infrastructure opportunity pipeline worth AUD 11.8 billion, with Australia’s five-year spend projected to reach AUD 150 billion by 2030. The company also noted a growing defense spending target of 3.0% of GDP by 2033.
The balance sheet strengthened, with net debt to EBITDA improving to 0.8x from 0.9x in June 2025. Interest coverage rose to 10.6x, while Fitch maintained the group’s BBB investment-grade rating. Liquidity stood at AUD 1.8 billion as of June 30, 2026, with AUD 679 million in available bonding capacity.
Chief Executive Peter Tompkins said FY2026 delivered earnings growth and margin expansion above targets, driven by a higher-quality portfolio. However, he cautioned that first-half FY2027 performance is expected to trail the prior period before improving, citing a larger-than-normal skew toward the second half. The company reaffirmed its FY2028 target of 9% compound annual growth in underlying earnings per share from FY2025, with long-term ambitions including a 4-5% revenue compound annual growth rate through FY2030 and an EBITA margin approaching 6%.
