Downer EDI Ltd reported a 6% rise in underlying earnings before interest, tax, depreciation and amortization (EBITDA) to $502.9 million for the fiscal year ended June 30, 2026, as its underlying EBITA margin expanded to 5.1%—exceeding the company’s target of more than 4.5% and up from 4.4% in FY25.
Pro forma revenue declined 4.6% to $9.8 billion, reflecting divestitures and foreign exchange pressures, though management noted a 2.8% decline on a comparable basis excluding these factors. Statutory net profit after tax surged 51% to $225.4 million, while underlying net profit after tax rose 10% to $306.7 million, within the guided range of $295 million to $315 million.
Cash conversion reached 91.1%, surpassing the company’s target of more than 90%, with adjusted operating cash flow totaling $642 million. Work-in-hand increased 10% to $38.5 billion, driven by $12.2 billion in new contracts secured during the year, including a $3.05 billion six-year defense services agreement covering critical assets in Queensland and New South Wales.
Underlying earnings per share rose to 42.9 cents, reflecting a three-year compound annual growth rate of 26%. The company returned $96.5 million to shareholders via its buyback program, part of a $260 million authorization, while total dividends increased 17% to 29.2 cents per share, fully franked for the first time at a 65% payout ratio.
Segment performance varied, with Energy & Utilities revenue down 10.9% to $2.5 billion but EBITA margin improving to 5.7% on a 20% rise in EBITA to $140.9 million. Transport revenue fell 3.3% to $5.2 billion, though EBITA margin expanded to 5.7% with EBITA up 6.8% to $297.0 million. Facilities revenue declined 1.8% to $2.1 billion, with EBITA margin at 6.8% and EBITA down 4.8% to $143.5 million.
Management reaffirmed medium-term targets, including a 4-5% revenue compound annual growth rate from FY26 to FY30, EBITA margins approaching 6%, and average cash conversion exceeding 90%. The company also outlined a $70 million transformation investment for FY27, up from $60 million in FY26, alongside targeted operational cost reductions of $20 million.
Downer operates 500+ sites and employs approximately 22,800 people, with work-in-hand structured across 93% services-based contracts, 92% of which include escalation mechanisms.
