Mayank Bansal, CFA
Mayank Bansal is a CFA Charterholder and heads the Equity Research team at Kapitales Research, with over 5 years of experience analysing global equity markets. He leads fundamental, data-driven research combining rigorous financial analysis with macro trends.
Channel Infrastructure Upgrades FY26 EBITDA Guidance After Strong Half-Year Results
Highlights
Strong Financial Performance in HY26
Channel Infrastructure NZ Limited (ASX: CHI) reported solid financial and operational results for the six months ended 30 June 2026. In its results announcement dated 28 August 2026, the New Zealand-based fuel import terminal operator highlighted revenue growth, improved earnings visibility and continued investment in fuel storage infrastructure.
Revenue rose 4% year-on-year to $72.9 million, compared with $70.2 million in the corresponding period last year. EBITDA increased 1% to $48.8 million, while net profit after tax climbed 47% to $19.3 million. The company also reported normalised free cash flow of $33.6 million, down from $35.2 million in HY25, primarily reflecting the timing of maintenance capital expenditure.
The EBITDA margin stood at 67%, compared with 69% a year earlier. Excluding the legacy Wiri lease, underlying revenue increased 5%, while underlying EBITDA rose 3%.
FY26 Earnings Guidance Raised
Channel Infrastructure upgraded its FY26 EBITDA guidance to between $103 million and $108 million, following an earlier increase in May from its initial outlook. The revised forecast reflects improved visibility over fuel throughput volumes, the commissioning of additional diesel storage for the New Zealand Government and the earlier completion of Z Energy’s jet storage project.
For FY27, the company expects further earnings contributions from recently completed and developing infrastructure projects. The Z Energy jet storage and Higgins bitumen terminal contracts are collectively expected to contribute approximately $9 million in EBITDA, while the government diesel storage contract is projected to contribute around $14 million over a full year.
Storage Expansion Strengthens Fuel Security
During the half-year, Channel Infrastructure commissioned an additional 123 million litres of jet and diesel storage at Marsden Point, increasing operational storage capacity at the site by approximately 40%.
The company completed the 93-million-litre diesel storage facility for the New Zealand Government in just nine weeks, adding capacity equivalent to around nine days of the country’s diesel demand. Meanwhile, the Z Energy jet storage project was completed in early July 2026, six months ahead of its original schedule and within budget. The company maintained pipeline and tank availability of approximately 99% despite disruption in global fuel supply markets. However, elevated fuel prices and interruptions to international flight schedules affected jet fuel demand during the second quarter.
Interim Dividend Increased
The Board declared an interim dividend of 7.25 cents per share, up 16% from 6.25 cents in HY25. The dividend is scheduled for payment on 24 September 2026, with eligible shareholders able to participate in the dividend reinvestment plan at a 1% discount.
Biorefinery Timeline Faces Delay
Channel Infrastructure also confirmed the US$5.95 million sale and removal of its decommissioned CCR Platformer unit as part of enabling works for the proposed Marsden Point Biorefinery. However, the consortium’s equity-raising process is taking longer than expected, with the final investment decision now likely to extend into 2027. Overall, stronger earnings guidance, expanded storage capacity and higher dividends underpin Channel Infrastructure’s outlook, while the timing of the proposed biorefinery investment remains a key development to monitor.
Note- All data presented is based on information available at the time of writing.
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