Synertec Corporation Limited has reported a robust 25% increase in revenue for FY26 Q2 alongside a significant turnaround to positive operating cashflow, underpinned by strong project pipelines and strategic partnerships.
- 25% revenue growth in FY26 Q2 compared to prior year
- Positive operating cashflow of $1.1 million, reversing prior quarter losses
- $1.1 million reduction in corporate and management costs
- Powerhouse units delivering over 90% EBITDA with multi-year leases
- Engineering business holds $110 million pipeline across 313 opportunities
Strong Financial Momentum
Synertec Corporation Limited (ASX, SOP) has delivered an impressive performance in the second quarter of FY26, reporting group revenue and other income of $5.1 million, a 25% increase on the prior corresponding period. For the first half of FY26, revenue reached $10.1 million, marking the highest half-year total since FY19. This growth is complemented by a $1.1 million reduction in corporate and management costs, reflecting management’s focused efforts on cost efficiency.
Perhaps most notably, Synertec achieved positive operating cashflow of $1.1 million in the quarter, a stark turnaround from the $0.6 million cash outflow recorded in the previous quarter. This shift signals improved operational discipline and a healthier cash position, with $2.7 million in cash at bank as of 31 December 2025.
Powerhouse Units Driving Profitability
The company’s Powerhouse technology units continue to be a key revenue driver, generating $0.6 million in the quarter at an EBITDA margin exceeding 90%. These units operate under multi-year lease agreements and have demonstrated exceptional reliability, with power availability rates surpassing 99.9% over several years in remote Queensland gas wells. Two additional units are under construction and expected to contribute revenue in the fourth quarter, supported by a robust pipeline of proposals valued at approximately $70 million.
Synertec’s strategy to “productise” Powerhouse unit construction aims to streamline manufacturing and accelerate deployment, with quality assurance teams active in both China and Australia to maintain high standards. The company’s renewable energy solution is gaining traction as a superior alternative to fossil fuel generators in remote locations, aligning with global decarbonisation trends.
Engineering Business Expansion and Pipeline
The Engineering division continues to build momentum, boasting 139 live tendered opportunities worth around $53 million and a total pipeline of 313 opportunities valued at $110 million. This growth is supported by a sector-focused restructure and geographic expansion, including new projects under the Sydney Water panel in New South Wales and increased activity in Western Australia and Queensland. The addition of a cyber security expert enhances the division’s capabilities, particularly in defence and operational technology resilience.
Recent tenders span a diverse client base, including major players such as Acciona, AGL, Chevron, ExxonMobil, and the Department of Defence, underscoring Synertec’s broad industry reach and strong client relationships.
Financial Position and Strategic Outlook
Synertec maintains solid liquidity with $2.7 million in cash and $15.3 million in unused financing facilities, including a $19 million secured loan facility with Altor Capital. The company’s financial strategy balances growth investment with cost control, positioning it well to capitalise on emerging opportunities in renewable energy and infrastructure.
Managing Director Michael Carroll emphasised confidence in sustaining profitable growth, highlighting the company’s strengthened business development capabilities through strategic partnerships and collaborations with global technology suppliers. These alliances are expected to drive manufacturing efficiencies and simplify scalable deployment of Synertec’s innovative solutions.
Bottom Line?
With a strong financial footing and an expanding project pipeline, Synertec is poised to accelerate its role in the renewable energy transition, investors will be watching closely for upcoming contract awards and operational milestones.
Questions in the middle?
- Which major contracts from the $70 million Powerhouse pipeline are likely to be awarded soon?
- How will Synertec manage the balloon repayment structure of its loan facilities in the medium term?
- What impact will geographic expansion and new sector expertise have on the Engineering division’s margins?