Bhagwan Marine Limited anticipates stable earnings and robust cash generation for the first half of FY26, underpinned by margin expansion and disciplined capital management.
- EBITDA forecast between $21.8m and $22.8m, consistent with prior periods
- Free cash flow surges to $8.5m–$9.0m, significantly higher than 1H25
- Net financial debt reduced sharply to $1.0m from $5.3m
- Capital expenditure of $12.5m includes $3.3m growth investments
- Maiden fully-franked dividend paid for FY25; interim dividend planned
Steady Earnings Amid Ongoing Demand
Bhagwan Marine Limited, Australia's leading marine solutions provider, has issued a positive trading update ahead of its first half FY26 results. The company expects EBITDA to land between $21.8 million and $22.8 million, maintaining a steady performance in line with previous periods. This consistency reflects sustained demand across its diverse service offerings in offshore energy, subsea, ports, inshore, and defence sectors.
Robust Cash Flow and Debt Reduction
Notably, Bhagwan has demonstrated strong cash generation, with free cash flow projected between $8.5 million and $9.0 million, an impressive leap from just $1.0 million in the same period last year. This cash strength has enabled the company to reduce its net financial debt (excluding operating leases) to a mere $1.0 million, down from $5.3 million at mid-2025. Such disciplined capital management signals a healthy balance sheet and operational efficiency.
Investment in Growth and Shareholder Returns
The company’s capital expenditure reached $12.5 million in 1H26, including $3.3 million directed towards growth initiatives. This investment aligns with Bhagwan’s strategic focus on expanding capabilities and exploring accretive opportunities, as outlined in its IPO prospectus. Meanwhile, Bhagwan paid its maiden fully-franked dividend of $1.4 million for FY25 and intends to declare an interim dividend for the current half, underscoring its commitment to returning value to shareholders.
Outlook and Strategic Focus
Founder and Managing Director Loui Kannikoski highlighted steady operational performance and a healthy pipeline of tendering activity, particularly noting margin expansion in the second quarter. Looking ahead, Bhagwan remains focused on executing its growth strategy, enhancing returns on assets, and maintaining strong free cash flow generation. The company’s upcoming audited financial results, due for release on 26 February 2026, will provide further clarity on these promising trends.
Bottom Line?
Bhagwan Marine’s disciplined growth and cash flow strength set the stage for sustained shareholder value creation.
Questions in the middle?
- How will Bhagwan’s growth capital expenditure impact future profitability?
- What specific projects are driving the healthy pipeline of tenders?
- Will the interim dividend declaration meet or exceed market expectations?