Boom Logistics (ASX:BOL) used its interim FY2026 earnings call to highlight improved underlying performance, strong cash generation, and upgraded guidance for the full year, while also addressing the operational and financial impacts of the Clarke Creek incident.
Management highlights upgraded EPS and buyback guidance
Chairman Kieran Pryke opened the presentation by saying the company was “very pleased with the underlying performance of the business,” pointing to upgraded earnings per share (EPS) and share buyback guidance for the full year. Pryke said the result reflected “momentum in our business and the strength of our execution,” despite challenges, and added the company now had “clear visibility on growth and capital management priorities.”
Strategy and operating priorities
Fernandez outlined Boom’s strategy as centered on four pillars: disciplined execution to create shareholder value; an ESG approach grounded in a safety-first culture; diversification across key sectors including resources, infrastructure, industrials, and renewables; and asset regeneration through fleet modernization and utilization focus.
He also emphasized diversification as a key strength, saying the company is not dependent on a single client or sector and can relocate fleet and people to areas of strongest demand. As examples of activity across different environments, Fernandez referenced projects spanning the Pilbara and Jimblebar, Western Australia’s AUD 2.8 billion Alkimos desalination plant, and New South Wales’ AUD 4.1 billion investment in transmission lines, including the EnergyConnect project.
Looking ahead, Fernandez said priorities included contract execution and tender conversion, margin growth supported by disciplined operations and asset investment, and continued capital returns. He said Boom was targeting labor efficiency above 85% and utilization above 85%, while completing a technology upgrade intended to lift productivity. The company also plans to divest underutilized equipment while investing in replacement and growth assets where return hurdles are met.
Safety, ESG, and Clarke Creek impact
On safety, Fernandez said a team member was lost at Clarke Creek in July, calling it a tragedy. He said the incident remains under investigation and that the company is committed to seeing the process through to completion.
Interim CFO Sarah Jones later noted the financial results included both statutory and underlying NPAT (net profit after tax), with the underlying measure adjusting for two items: costs associated with the Clarke Creek incident and a reimbursement related to the misuse of funds by the former CEO. Jones said NPAT was up on both statutory and underlying bases and reflected “solid business performance.”
In the Q&A, Pryke said the company would take “all appropriate measures to recover what we are entitled to” in relation to insurance, but added the process is complicated and the matter remains subject to a regulator review.
Segment commentary: resources and infrastructure offset renewables softness
Discussing segment performance, Jones said resources and infrastructure anchored earnings, while renewables activity remained “selective and disciplined on margins.” She said first-half revenue from renewables was lower due to the Clarke Creek incident, but that other areas of the business picked up the shortfall.
Jones also said the renewables pipeline is taking longer to execute due to project approval processes, though she noted “green shoots in the near-term pipeline.” Fernandez added in Q&A that renewables conditions looked softer over the next six to 12 months because of approvals, but he expected the cycle to pick back up within 12 to 18 months.
On mining and resources market conditions, Fernandez attributed performance improvements to increased fleet productivity, a better margin mix, and labor efficiency management, adding that Boom’s resources exposure is diversified and “working for us quite well.” He said the company expected that to continue.
Cash flow, capital spending, and balance sheet position
Jones said the company was “very pleased” with strong cash generation, attributing it primarily to lower capital expenditure (CapEx) intensity and improved cash conversion. She emphasized that the cash result was achieved after debt servicing and lease payments and said it supported balance sheet resilience and flexibility for capital returns.
Net debt remained “conservative and well within” Boom’s target gearing range of 35% to 45%, according to Jones. She said financing facilities are “fit for purpose,” leasing remains flexible with typical terms of three to five years, and the company is fully compliant with covenants, with flexibility to pay down more debt if desired.
Jones also detailed first-half asset investment and disposals:
- Gross CapEx of AUD 4.4 million
- Asset disposals of AUD 2.7 million
- Net CapEx of AUD 1.7 million
She said net CapEx was materially lower than prior periods as the company moves toward a more balanced, steady-state level, and she expected a “modest tick-up” in the second half.
During Q&A, management acknowledged some seasonality and variability in cash flow. Responding to a question on free cash flow and the split between halves, Pryke said second-half cash generation would likely not be as strong, with CapEx funding choices a “big swinger.” He said operational performance was expected to continue on a steady trajectory, but cautioned that CapEx could change based on contract wins and equipment timing.
On CapEx expectations, Pryke said second-half net CapEx would be “a little bit above AUD 10 million” based on current commitments, while noting it could swing if additional work is awarded requiring equipment not currently in place.
Management also addressed capital management policy language during the webcast Q&A, saying it had been simplified from being based on a rolling two-year average operating NPAT to being based on prior-year NPAT. Pryke said the prior approach reflected where the business had been in earlier years, and the change reflected confidence in the current position and trajectory.
For revenue visibility, Fernandez said contracts across resources, infrastructure, and renewables can vary from one to five years, with resources tending to have longer-term agreements. He added it was “fair to say” that the majority—over 50%—of the business has recurrent revenue, and the company aims to increase that percentage.
On shareholder returns and valuation, Pryke said the company had increased capital deployed to the buyback and would continue to assess capital deployment over time. He also said Boom’s plan is for margins to improve as long-term resource contracts roll over, but added the company “can’t guarantee it.”
About Boom Logistics (ASX:BOL)
Boom Logistics Limited provides lifting solutions to mining and resources, infrastructure and construction, wind, energy, and utilities, industrial maintenance, and telecommunications sectors in Australia. It offers cranes, such as mobile and crawler cranes, travel towers, access equipment, and associated services. The company also provides special hydraulic mobile cranes and low profile prime movers; access equipment, including boom lifts, knuckle booms, elevated work platforms, and travel towers.
