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.
Emeco Holdings FY26 Results: Earnings Rise as Strong Cash Flow and Lower Debt Strengthen Growth Platform
Highlights
Earnings Growth Continues Despite Utilisation Headwinds
Emeco Holdings (ASX: EHL) announced its FY26 results on 20 August 2026, delivering moderate earnings growth despite lower-than-anticipated surface fleet utilisation during the second half. Revenue increased 1% year-on-year to AU$792.8 million, while Operating EBIT advanced 2% to AU$148.0 million. Operating NPAT increased 5% to AU$89.0 million, with earnings per share rising 2% to 14.8 cents. The company attributed revenue growth primarily to expanding maintenance services, which helped offset weaker fleet utilisation. Operating EBITDA declined 3% to AU$292.5 million, reflecting a greater contribution from lower-capital maintenance services.
Strong Cash Generation Supports Deleveraging
Emeco generated Operating Free Cash Flow of AU$127.6 million, with adjusted Operating Free Cash Flow of AU$114.5 million and cash conversion of 108%. Balance-sheet improvement was another key feature of FY26. Net debt fell by AU$67.8 million to AU$127.1 million, while net leverage improved from 0.65x to 0.43x. Liquidity stood at approximately AU$315 million, including AU$125.4 million in cash.
Maintenance Business Strengthens Growth Profile
Emeco’s maintenance operations continued to expand, with total maintenance revenue reaching AU$457.6 million in FY26 compared with AU$399.2 million in FY25. Maintenance Operating EBIT increased to AU$67.2 million from AU$48.9 million. The company continues to position maintenance and technology as key growth drivers, supported by equipment rebuild capabilities, predictive maintenance and AI-enabled asset management.
FY27 Outlook Focuses on Higher Utilisation
For FY27, Emeco expects earnings broadly in line with FY26, with a second-half weighting, alongside continued strong free cash flow and further deleveraging. Surface fleet utilisation is forecast to reach approximately 90% and underground utilisation approximately 80% by the end of FY27. Net capital expenditure is forecast at around AU$155–165 million.
Looking further ahead, management is targeting a 20% return on capital as utilisation improves, while retaining balance-sheet flexibility for growth opportunities, sector consolidation and shareholder returns.
Note- All data presented is based on information available at the time of writing.
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