Perenti (ASX:PRN) management said the company delivered first-half FY26 results in line with expectations, posting a new first-half EBITA record while continuing to strengthen the balance sheet. Managing Director and CEO Mark Norwell and CFO Mike Ellis also highlighted a second-half weighted earnings and cash flow profile, consistent with prior years, and provided updated FY26 guidance that reflected currency movements and revised capital spending expectations.
First-half results: record EBITA and higher interim dividend
Norwell said first-half revenue was similar to the first half of FY25, while EBITDA was “slightly lower” following the conclusion of the Botswana underground project at the end of FY25. Despite that change in portfolio mix, the company reported a new half-year EBITA record of AUD 160 million, with an EBITA margin of 9.3%, up from 9.0% in the prior corresponding period.
Perenti reported normalized free cash flow of AUD 33 million, adjusted for delayed debtor receipts that were collected in January. Net leverage reduced to 0.6x from 0.9x a year earlier, and Norwell said gross debt fell to its lowest point since Perenti acquired Barminco in 2018, following repayment of the remaining 2025 Senior Unsecured Notes in July 2025.
The board declared an interim dividend of AUD 0.0325 per share, an 8% increase from AUD 0.03 in the first half of FY25.
Safety and operational initiatives
Norwell reiterated that safety remained the company’s “first priority,” pointing to ongoing investment in frontline safety leadership and updates to divisional critical risk frameworks and verification tools. Perenti also implemented practical safety enhancements across the business, including in-vehicle monitoring systems, improved operator visibility, upgraded gas monitoring, smart camera exclusion zones, and standardized controls for working at height across the drilling fleet.
Divisional performance: contract mining mix shift, drilling utilization, and MTS improvements
Perenti said contract mining contributed around 70% of group revenue and 74% of underlying EBITA before corporate costs. Norwell said the revenue mix transition continued in line with strategy, with new and existing projects substituting for projects that concluded in Burkina Faso and Senegal. The end of the Botswana underground contract helped lift first-half contract mining EBITA margin to 11.1%.
Management cited ongoing strength in work in hand, including projects such as Great Fingall in Australia, Gold Rush in the U.S., and Mana in Africa ramping up. The Dalgaranga contract, awarded in July 2025, was also expected to contribute more in the second half.
In drilling services, Perenti reported revenue of AUD 422 million, up 9% from the first half of FY25, with utilization improving. Management said demand remained strong, particularly in gold and copper projects, and the division was positioned for margin expansion as market capacity tightens. Norwell noted Swick had recently won and mobilized three new North American projects; the multiple mobilizations temporarily impacted margins, with improvement expected in the second half and into FY27 as those projects reach steady state.
Mining and technology services delivered improved performance compared with the prior corresponding period. Norwell said the BTP rental fleet saw higher utilization as idle fleet returned to work, though still below historical levels. BTP parts were described as “below expectations,” which management said represented an opportunity for improvement in the second half. idoba continued to focus on its underground simulation tool, with costs reducing as planned and further reductions forecast in the second half of FY26.
Cash flow, debt reduction, and refinancing
Ellis said first-half revenue was AUD 1.73 billion, with the Botswana underground project (which contributed about AUD 120 million in the prior half) having completed at the end of FY25. He said new work and scope increases at Great Fingall, Dalgaranga, Gold Rush, and Mana, together with improved drilling utilization, helped offset the lost Botswana contribution.
Depreciation declined to AUD 157 million from AUD 168 million, driven by the sale of the underground fleet in Botswana and the conclusion of two surface mining contracts (Sabodala and Mako), which Ellis said carried higher depreciation relative to underground and drilling projects. He said group depreciation was expected to normalize at “low to mid-9%” of revenue.
Interest expense was AUD 28 million, down 20% year over year, which Ellis attributed to the early repayment of the 2025 notes and lower gross debt. The effective tax rate was 30.2% in the half, with management still expecting an effective tax rate of about 32% for FY26.
On cash flow, operating cash flow before interest and tax was AUD 193 million, lower than the prior period due mainly to the timing of debtor receipts and credit payments at project completions. Perenti received AUD 50.3 million of overdue debtor receipts in January, which affected reported free cash flow at period end. After adjusting for those late receipts, normalized free cash flow was AUD 33.1 million, up 8% year over year, representing cash conversion of 77%. Ellis said the company remained confident in delivering cash conversion in line with historical averages of greater than 95% for the full year, with free cash flow expected to be second-half weighted.
Gross capital expenditure was AUD 170.7 million, in line with the prior corresponding period, and Perenti realized AUD 21.4 million from the sale of assets and investments, including assets sold to clients at completed projects such as Yaramoko, Samrado, and Mako. Debt repayments totaled AUD 135.4 million during the half.
Perenti ended the period with cash of AUD 275 million and total liquidity of AUD 818 million, including AUD 543 million of undrawn committed facilities. Ellis said the company completed an “heavily oversubscribed” refinancing of its syndicated debt facility, increasing capacity to AUD 650 million, improving pricing, and extending maturities.
Outlook: work in hand, pipeline, and revised FY26 guidance
Norwell said secured work in hand at 31 December 2025 was AUD 5.8 billion, reflecting a normal drawdown of executed work and partial replacement through new and expanded projects. The pipeline was AUD 18.6 billion, with North America representing a growing component.
In North America, Norwell said Barminco received a letter of intent from Barrick for the Four Mile project in Nevada to undertake limited early work readiness activities. He described the LOI as an important step toward progressing the project, with Perenti working with Barrick to finalize scope and contractual arrangements. Earnings were anticipated to commence mid-FY27, following a formal award expected “in the coming months.” Norwell also referenced the neighboring Gold Rush project ramp-up and said mine expansion plans at Red Chris in Canada were in the process of being finalized.
Management said the strengthening Australian dollar tempered expectations for the top end of revenue and EBITA guidance. However, Perenti increased free cash flow guidance to greater than AUD 170 million and reduced capital expenditure guidance to AUD 325 million. Norwell said the company expected a second-half EBITA step-up broadly similar to FY25, with anticipated contributions of:
- AUD 10 million to AUD 15 million from contract mining
- AUD 5 million to AUD 10 million from drilling services
- The balance from mining and technology services
Perenti also expected to benefit from lower interest payments in the second half due to gross debt reductions.
Norwell said activity in the exploration drilling market was building and that drilling utilization was expected to lift through the remainder of FY26 and into FY27.
In closing remarks, Norwell reiterated that FY26 would be his final year with Perenti, noting the board was well progressed in the search for a new MD and CEO and that details would be shared when an appointment is announced.
About Perenti (ASX:PRN)
Perenti Limited operates as a mining services company worldwide. It operates through Contract Mining Surface, Contract Mining Underground, and Mining Services and idoba segments. The company offers mining services, including drilling and blasting, in-pit grade control, exploration drilling, and earthmoving services, as well as underground mining and diamond drilling services. It also provides mining support services, such as equipment hire, equipment parts and sales, equipment supply, logistics services, and technology driven products and services.
