NRW Holdings Navigates $110M OneSteel Hit Amid 12% Revenue Surge

Robust Growth Amidst Operational Challenges

NRW Holdings Limited (ASX, NWH) has delivered a resilient financial performance for the year ended 30 June 2025, posting a 12.2% increase in revenue to $3.3 billion. This growth was primarily driven by record performances in its Civil and Minerals, Energy & Technologies (MET) segments, which experienced double-digit revenue increases of 25.7% and 17.7% respectively. These gains helped offset a softer showing from the Mining segment, which was adversely affected by unprecedented rainfall in Queensland and contract terminations.

Underlying earnings before interest, tax, and amortisation (EBITA) rose 6.6% to $207.9 million, reflecting the group's ability to maintain profitability despite challenging external conditions. However, the overall EBITA margin slightly contracted to 6.4% from 6.7% the previous year, largely due to the lower-margin Civil and MET segments expanding their share of the business and the weather-related impact on mining operations.

OneSteel Impairment Clouds Statutory Earnings

The statutory EBIT was significantly affected by a $110.5 million non-underlying impairment related to the receivable balance from OneSteel Manufacturing Pty Ltd. This impairment followed South Australian government legislation that retrospectively appropriated assets securing NRW’s receivables, a move described as unprecedented by the company. NRW’s subsidiary Golding continues to provide mining services to OneSteel’s administrators and is actively pursuing recovery options, including legal proceedings and negotiations with Liberty Primary Metals Australia Pty Ltd, the parent company of OneSteel.

Despite this setback, NRW remains optimistic about its recovery prospects and is engaged in ongoing court actions, with a judgment expected shortly. The impairment has weighed heavily on statutory net profit after tax, which fell sharply compared to the prior year.

Strong Contract Wins and Pipeline Support Outlook

Looking ahead, NRW’s order book stands at a healthy $6.1 billion, supported by repeat business and preferred tenders. The company’s pipeline of potential projects remains robust at $17.3 billion, with $5.6 billion in active tenders. Notable contract wins during the year include a $1.6 billion five-year Mining Services Agreement at South Walker Creek and a $360 million six-year contract for Evolution Mining’s Castle Hill gold project. These contracts are expected to underpin a stronger mining segment performance in FY26, assuming a return to normal weather conditions.

The Civil segment is well positioned to capitalize on infrastructure investments in Western Australia and Queensland, including projects related to Westport, Perth Airport, and the upcoming Brisbane 2032 Olympics. Meanwhile, the MET segment continues to expand its capabilities and geographic reach, with innovation initiatives such as Primero’s lithium refining technology potentially opening new revenue streams beyond traditional contracting.

Dividend and Guidance Signal Confidence

Reflecting its solid cash flow and confidence in future earnings, NRW declared a fully franked final dividend of 9.5 cents per share, up 5.6%, bringing the total dividend for FY25 to 16.5 cents. The company also confirmed guidance for FY26, forecasting revenue exceeding $3.4 billion and underlying EBITA between $218 million and $228 million, with cash conversion expected to remain consistent with long-term averages.

NRW’s Managing Director and CEO, Jules Pemberton, highlighted the resilience of the diversified business model and the dedication of its workforce as key factors in navigating the year’s challenges. The company’s strong balance sheet, with $265.7 million in cash and $330 million in undrawn debt facilities, positions it well for strategic opportunities ahead.