Energy Action Limited reported a strong 20.1% revenue increase in the first half of FY26, driven by robust energy procurement activity, yet net profit after tax fell sharply due to higher amortisation and tax expenses.
- Revenue up 20.1% driven by energy procurement contracts
- EBITDA rises 16.8% despite modest expense increases
- NPAT declines 35.7% due to higher amortisation and tax
- Contract assets increased 10% to $8.24 million
- Operating cash flow turns negative amid lower R&D tax offsets
Strong Revenue Growth Anchored by Energy Procurement
Energy Action Limited (ASX – EAX) has unveiled its half-year results for the six months ending 31 December 2025, showcasing a 20.1% surge in total revenue to $6.39 million. This growth was primarily fuelled by the company’s energy procurement segment, which saw a 31% increase to $3.51 million, reflecting renewed contracts and sustained demand for auction-based and structured energy purchasing services.
The company’s energy management and solar and battery procurement divisions also contributed to the overall revenue, though to a lesser extent. Energy management revenue grew modestly by 6.4%, while solar and battery procurement revenue experienced a substantial percentage increase from a low base, albeit still a small portion of total revenue.
Profitability Mixed – EBITDA Up, NPAT Down
Despite the revenue momentum, Energy Action’s net profit after tax (NPAT) fell 35.7% to $0.59 million. The decline was largely attributed to a $0.32 million rise in amortisation expenses linked to a shorter useful life assigned to the company’s intangible asset, Utilibox, and a $0.34 million increase in income tax expense. Earnings before interest, tax, depreciation, and amortisation (EBITDA), however, rose 16.8%, indicating that operational profitability remains on an upward trajectory.
The divergence between EBITDA and NPAT highlights the impact of non-cash charges and tax timing on reported earnings, a nuance that investors will want to monitor closely in upcoming periods.
Balance Sheet and Cash Flow Dynamics
Energy Action’s balance sheet shows a 10% increase in contract assets to $8.24 million, representing revenue recognised but not yet invoiced, primarily from energy procurement contracts. Forward contracted revenue from energy management services also edged up slightly to $11.42 million, underpinning future revenue streams.
However, operating cash flow turned negative to ($0.09) million, a reversal from the prior period’s positive $1.41 million, partly due to a reduced research and development tax offset. Financing activities included a $1.06 million net drawdown from the Commonwealth Bank of Australia, aimed at supporting business growth initiatives.
Outlook and Strategic Focus
CEO Derek Myers expressed optimism about the company’s trajectory, emphasizing a clear strategy to deliver sustainable and profitable growth while enhancing shareholder and customer value. The company’s focus on expanding its energy procurement services and managing contract renewals appears to be paying dividends, though the impact of amortisation and tax expenses will require ongoing attention.
As Energy Action navigates the balance between growth and profitability, the coming quarters will be critical in demonstrating whether the current investments and contract structures can translate into stronger net earnings and cash flow generation.
Bottom Line?
Energy Action’s revenue growth is promising, but profitability pressures and cash flow challenges warrant close investor scrutiny ahead.
Questions in the middle?
- Will amortisation expenses stabilise or continue to weigh on NPAT?
- How sustainable is the current growth in contract assets and forward revenue?
- Can operating cash flow return to positive territory without relying on financing?