OneSteel Receivables Impairment Clouds NRW Holdings’ FY25 Profit Outlook

Financial Highlights and Segment Performance

NRW Holdings Limited delivered a solid financial performance for the fiscal year ended 30 June 2025, with total revenue climbing 12.2% to $3.27 billion. This growth was driven by strong contributions across all three operational segments – Civil, Mining, and Minerals, Energy & Technologies (MET). Underlying EBITA increased by 6.6% to $207.9 million, reflecting improved margins in the Civil and MET segments despite margin pressure in Mining.

The Civil segment saw a 25.7% revenue increase, buoyed by a robust pipeline of resources projects and completion of key infrastructure contracts, including the Wilman Wadandi Highway and various Rio Tinto projects. Meanwhile, the MET segment experienced a 17.7% revenue uplift, with notable success from Primero’s engineering projects and RCR’s turnaround performance. The Mining segment’s revenue was relatively flat but faced margin compression due to adverse weather conditions in Queensland and the early termination of the Mt Cattlin lithium contract.

OneSteel Receivables Impairment and Legal Developments

A significant challenge for NRW in FY25 was the impairment of $110.5 million related to receivables from OneSteel Manufacturing Pty Ltd and Whyalla Ports Pty Ltd. Following OneSteel’s administration and subsequent legislative changes by the South Australian Government affecting the enforceability of collateral, NRW reassessed the recoverability of these amounts and recorded a full allowance for credit loss. The situation remains fluid, with ongoing legal proceedings and administration processes influencing potential recovery.

This impairment notably impacted statutory profit, although NRW’s underlying net profit after tax (NPAT) still rose slightly to $127.2 million. The company has taken steps to protect its position, including securing guarantees and collateral prior to the administration, and continues to pursue recovery avenues.

Strategic Acquisition and Balance Sheet Strength

In August 2024, NRW’s subsidiary Golding acquired the HSE SWC mining services contract, along with associated fleet and approximately 539 employees. This acquisition expanded NRW’s footprint in the mining services sector and contributed $214.9 million in revenue during FY25. The integration of HSE’s operations into Golding was largely completed within 11 months, supporting NRW’s growth strategy.

NRW’s balance sheet reflects this expansion, with property, plant, and equipment increasing to $604.6 million and net debt rising to $145.4 million, resulting in a gearing ratio of 23.8%, still within the company’s internal targets. Cash holdings improved to $265.7 million, supporting liquidity and operational flexibility.

Safety, Governance, and Climate Commitments

Safety remains a paramount focus for NRW, particularly following the tragic fatality of a subcontractor on the HWA Freeway project in October 2024. The Board applied a 20% safety moderator reduction to the short-term incentive awards of relevant executives, underscoring accountability. NRW continues to enhance its Critical Risk Management program and psychosocial safety initiatives.

On the environmental front, NRW has strengthened its governance of climate-related risks and opportunities. The company has set an ambitious target to reduce greenhouse gas emissions intensity by 60% by FY30, supported by initiatives such as transitioning to hybrid and electric vehicles and investing in renewable energy across its operations. The Board and Sustainability Committee oversee these efforts, integrating climate considerations into strategic and financial planning.

Executive Remuneration and Shareholder Returns

NRW’s remuneration framework continues to evolve in response to shareholder feedback, with the Nomination & Remuneration Committee engaging independent consultants to benchmark executive pay. The FY25 short-term incentive plan focused on earnings and revenue growth, with deferrals applied to align rewards with shareholder experience, particularly in light of the OneSteel impairment. The FY22 long-term incentive plan vested at 86.31%, reflecting strong total shareholder return and gearing performance.

The Board declared a final fully franked dividend of 9.5 cents per share, payable in October 2025, bringing total dividends for the year to 16.5 cents per share. This reflects NRW’s commitment to delivering shareholder value while maintaining financial discipline.

Outlook and Market Position

NRW enters FY26 with a strong order book of approximately $6.1 billion and active tenders totaling $5.6 billion, underpinning a total pipeline of $17.3 billion. The Civil segment is well positioned to capitalize on infrastructure growth in Western Australia and Queensland, including projects linked to the 2032 Brisbane Olympics. The Mining segment benefits from long-term contracts and a diversified commodity portfolio, while MET continues to innovate and expand in engineering and technology services.

While the OneSteel situation remains a key risk, NRW’s diversified operations, disciplined capital management, and focus on safety and sustainability provide a solid foundation for future growth.