Mitchell Services Posts $11M Operating Cash Flow, Slashes Net Debt by 40% in Q4
Mitchell Services Limited reported a robust fourth quarter with strong cash flow driving a significant net debt reduction, while its Loop decarbonisation joint venture gains momentum with new contracts.
- Q4 revenue of $50.5 million and EBITDA of $7.7 million
- Operating cash flow exceeded EBITDA, enabling 40% net debt reduction
- Temporary mine shutdowns impacted utilisation but resolved promptly
- Loop decarbonisation JV secures Letter of Intent for second project
- Coal sector challenges persist; gold sector demand rising
Solid Q4 Performance Despite Operational Setbacks
Mitchell Services Limited (ASX – MSV) closed its 2025 financial year on a strong note, delivering $50.5 million in revenue and $7.7 million in EBITDA during the fourth quarter. While these figures represent a decline compared to the same period last year, the company’s operational cash flow of $11 million; an impressive 143% conversion of EBITDA; underscores robust cash generation and operational efficiency.
However, the quarter was not without challenges. Two separate incidents temporarily halted production at key mining sites – an underground water inrush at Oakey Creek and a gas-related suspension at Moranbah North. Both events disrupted drilling activities and constrained utilisation rates, slightly dimming what could have been an even stronger quarter. Encouragingly, these issues have been resolved, and operations have resumed.
Financial Health Strengthened by Cash Flow and Debt Reduction
The company’s disciplined cash management translated into a substantial 40% reduction in net debt, falling from $14.2 million at the end of March 2025 to $8.4 million by June 30. This deleveraging is a positive signal to investors, especially amid a year marked by transition and investment in new projects. Despite a 9.9% drop in quarterly revenue and a 21.9% decline in EBITDA compared to the prior year quarter, the company’s ability to convert earnings into cash remains a standout feature.
Loop Decarbonisation – A New Growth Avenue
Beyond traditional mining services, Mitchell Services is advancing its Loop decarbonisation joint venture with Talisman Partners. Loop, which focuses on reducing fugitive emissions in mining operations, has completed its first successful project trial and secured a Letter of Intent for a second engagement. This early traction in the decarbonisation space positions the company well to capitalize on emerging environmental regulations and sustainability trends within the mining sector.
Sector Dynamics and Outlook
The coal sector remains challenging due to depressed commodity prices and operational disruptions, impacting rig utilisation. Conversely, the gold sector, which accounts for approximately 45% of Mitchell’s revenue, is benefiting from record high prices, driving increased customer enquiries. The company’s extensive client base across Queensland and New South Wales provides a strategic advantage to capture upside as market conditions normalize.
Looking ahead, Mitchell Services anticipates resuming shareholder returns, likely through its recently renewed share buyback program, once business performance stabilizes. The company’s management remains cautiously optimistic, balancing ongoing market headwinds with promising growth initiatives.
Bottom Line?
Mitchell Services’ strong cash flow and strategic pivot into decarbonisation set the stage for recovery and growth amid sector headwinds.
Questions in the middle?
- How will recent mine incidents affect operational performance in FY26?
- What is the potential scale and profitability of the Loop decarbonisation business?
- When might shareholders expect concrete returns via buybacks or dividends?
