Synertec Faces Covenant Challenges but Engineering EBITDA Rebounds Strongly

Financial Overview

Synertec Corporation Limited closed its 2025 financial year with revenues of $18.2 million, marking an 8% decrease from the prior year. The company reported a net loss after tax of $7.64 million, slightly wider than the $7.26 million loss in FY2024. Despite these headline figures, Synertec’s underlying business dynamics reveal a more nuanced story of resilience and strategic repositioning.

The Engineering division, which accounts for the bulk of Synertec’s revenue, experienced a 13% decline to $15.5 million, primarily due to a softer market and project delays in the first half of the year. However, decisive cost management and restructuring efforts led to a normalized EBITDA improvement to $2.2 million, up from $0.8 million the previous year. This turnaround was supported by significant panel contract wins, notably in the water sector, including appointments to Sydney Water’s SCADA and Electrical Services Panel and Western Australia’s Water Corporation Process Control Technologies Panel, unlocking access to substantial infrastructure projects.

Powerhouse Technology Accelerates Growth

Synertec’s Technology segment, anchored by its proprietary Powerhouse renewable microgrid system, delivered a remarkable 90% revenue increase to $2 million. Powerhouse has now powered remote Queensland coal seam gas wells for over five years with 99.9% availability, a performance milestone that has attracted growing interest from other energy operators. The company has strengthened its supply chain through strategic MOUs with global battery manufacturers and technology providers, positioning Powerhouse for scalable deployment across industrial and utility-scale applications.

Further, Synertec expanded its technology portfolio through a strategic partnership and investment in PHNXX Pty Ltd, targeting smaller-scale, low-cost solar and battery systems for agricultural and remote community applications. This diversification complements Powerhouse’s industrial focus and opens additional revenue streams through software licensing and cross-referral sales cooperation.

Governance and Strategic Renewal

FY2025 was also a year of leadership renewal and strategic recalibration. The Board welcomed Johannes Risseeuw as Chair in February 2025, following the retirement of Dennis Lin. Executive changes included David Harris transitioning from CFO to Head of Technology Solutions to spearhead Powerhouse commercialization, with Yash Gala promoted to CFO. These changes reflect Synertec’s sharpened focus on growth sectors and technology innovation.

Synertec secured a $19 million funding facility with Altor Capital Management, including a recent $4 million extension with covenant waivers, providing liquidity to support ongoing operations and growth initiatives. The company remains vigilant on managing covenant compliance and cash flow, with a cash balance of $3.7 million at year-end.

ESG Commitment and Market Position

Environmental, Social, and Governance (ESG) principles remain central to Synertec’s strategy. The company reported significant reductions in Scope 1 and 2 greenhouse gas emissions and highlighted Powerhouse’s contribution to lowering Santos’ emissions by an estimated 2,400 tonnes of CO₂e annually. Workforce diversity and inclusion initiatives continue to evolve, with a culturally diverse team and strong employee engagement.

Synertec’s engineering expertise spans critical sectors including water, transport, energy and resources, life sciences, and defence. The company’s long-standing client relationships and panel memberships underpin a robust pipeline of opportunities, particularly in water infrastructure projects valued at hundreds of millions over the coming years.

Looking Ahead

While FY2025 presented financial challenges and market headwinds, Synertec’s strategic actions have laid a foundation for growth. The rebound in engineering profitability, combined with accelerating technology commercialization and strengthened supply chains, position the company to capitalize on expanding infrastructure investment and the global energy transition. Investors will be watching closely as Synertec seeks to convert its pipeline into revenue and navigate ongoing macroeconomic uncertainties.