Mitchell Services Posts $9.6m Quarterly EBITDA, Achieves $7.2m Net Cash
Mitchell Services Limited has reported a remarkable first half of FY26, posting a 71% increase in quarterly EBITDA and achieving a net cash position of $7.2 million. The company’s strong operating cashflows and improved market conditions underpin its optimistic outlook.
- Quarterly EBITDA up 71% to $9.6 million
- Exponential growth in earnings before tax (EBT)
- Net cash position of $7.2 million achieved
- Non-cash impairment of $1.4 million due to bushfire, fully insured
- Progress in Loop Decarbonisation business with Sumitomo investment
Robust Financial Performance in FY26 Q2
Mitchell Services Limited (ASX, MSV) has delivered a standout performance in the second quarter of FY26, reporting a 71% increase in EBITDA to $9.6 million compared to the same period last year. Earnings before tax (EBT) surged exponentially, reflecting a significant turnaround from FY25. This strong momentum has carried through the first half of the financial year, positioning the company on a solid growth trajectory.
Key drivers behind this improvement include favourable weather conditions and the absence of client-initiated project delays or scope reductions, which had previously weighed on operations. Additionally, projects that incurred ramp-up costs in FY25 have now transitioned to steady-state operations, contributing positively to the bottom line.
Balance Sheet Strength and Cash Flow Discipline
Mitchell Services’ disciplined capital expenditure and robust operating cashflows have transformed its balance sheet, moving from a net debt position of $8.4 million at mid-year to a net cash position of $7.2 million by December 31, 2025. This turnaround is underpinned by $15.5 million in cash against $8.3 million in equipment finance debt, providing the company with enhanced financial flexibility.
The company also made full income tax payments during the half, rebuilding its franking credit balance to $5.2 million, which bodes well for future fully franked dividends. This financial strength affords Mitchell Services optionality in capital management and growth initiatives, with the Board set to discuss strategic directions in the coming weeks.
Operational Highlights and Market Outlook
The company operated an average of 62 rigs from a fleet of 90 during the half, indicating capacity to scale up should demand increase. While demand for drill rigs in the coal sector, particularly in Queensland, remains subdued, interest in minerals such as copper and gold is rising, reflecting broader commodity price trends.
A non-cash impairment of approximately $1.4 million was recorded due to bushfire damage to a drill rig and ancillary equipment in Western Australia. The assets are fully insured, and an insurance claim benefit is expected to be recognised in the next quarter, mitigating the financial impact.
Advances in Decarbonisation Initiatives
Mitchell Services continues to build momentum in its Loop Decarbonisation business following investment from Sumitomo Corporation. The company recently secured a contract for in-field operations expected to commence in FY26 Q4, with strong interest from other clients for advisory services related to emerging industry legislation. This strategic diversification aligns with growing environmental and regulatory focus in the mining services sector.
CEO Andrew Elf expressed confidence in the company’s position, highlighting the strong foundation laid in the first half and the opportunities ahead as market conditions improve and new business streams develop.
Bottom Line?
Mitchell Services’ strong half-year results and net cash position set the stage for strategic growth, but upcoming capital management decisions will be key to watch.
Questions in the middle?
- How will Mitchell Services deploy its strengthened balance sheet to drive growth?
- What impact will subdued coal sector demand have on future revenue streams?
- How significant will the Loop Decarbonisation business become in the company’s portfolio?
