NRW Holdings reported a robust first half of FY26, driven by strong segment performances and the strategic acquisition of Fredon Industries, boosting revenue and profits significantly.
- Revenue up 19.5% to $1.97 billion
- Underlying EBITA rises 36.4% to $132.3 million
- Fredon acquisition adds $206.9 million revenue and $9.5 million EBITA
- Net debt increases due to acquisition funding but remains within targets
- Interim dividend increased by 21.4% to 8.5 cents per share
Strong Half-Year Performance
NRW Holdings Limited has delivered a compelling half-year financial report for the six months ending 31 December 2025, showcasing a 19.5% increase in revenue to nearly $2 billion. This growth was underpinned by solid contributions from its core Civil, Mining, and Minerals, Energy & Technologies (MET) segments, alongside the successful integration of Fredon Industries, which expanded NRW’s capabilities into electrical, mechanical, infrastructure, and technology services.
The company’s underlying earnings before interest, tax, depreciation, and amortisation (EBITA) surged 36.4% to $132.3 million, reflecting improved margins across key divisions. Underlying net profit after tax (NPAT) also rose sharply to $83.1 million, signalling strong operational discipline and effective cost management.
Fredon Acquisition Bolsters EMIT Segment
In a strategic move completed in October 2025, NRW acquired Fredon Industries for a headline enterprise value of $200 million. Fredon, a national leader in electrical and HVAC services, contributed $206.9 million in revenue and $9.5 million in underlying EBITA in just three months post-acquisition. This addition created NRW’s fourth business pillar, Electrical, Mechanical (HVAC), Infrastructure & Technology (EMIT), broadening the Group’s service offering and market reach, particularly in sectors aligned with energy transition and infrastructure development.
Fredon’s footprint across Australia and New Zealand, coupled with its exposure to data centres, health, defence, and industrial sectors, positions NRW well to capitalise on emerging opportunities. Notably, Fredon secured data centre contracts valued at $150 million late in 2025, underscoring its growth potential within the expanding digital infrastructure market.
Segment Highlights and Market Position
The Civil segment recorded a 6.3% revenue increase, driven by strong urban development projects in South East Queensland and key infrastructure contracts in Western Australia. Despite some underperformance on a Queensland contract, the segment secured several new major contracts, including significant mine development and bulk earthworks projects with Rio Tinto.
The Mining segment maintained robust profitability with a 9.0% EBITA margin, benefiting from favourable weather conditions and operational efficiencies. While revenue dipped slightly due to project completions, new contracts such as the $750 million Stanwell Meandu Mine deal underpin a strong pipeline.
The MET segment experienced substantial growth, with revenue climbing 32% and margins improving to 7.7%. Businesses within MET, including Primero and RCR, delivered solid project execution and expanded their geographic reach, particularly targeting North American markets.
Financial Position and Capital Management
NRW’s net debt increased to $200.4 million, primarily reflecting the debt-funded Fredon acquisition. Despite this, gearing ratios remain within internal targets, supported by strong cash flow generation and disciplined working capital management. Cash balances reached a record $342.4 million, bolstered by 114.1% operating cash conversion.
The Group also amended its senior banking facilities post-period, increasing limits by $42 million to accommodate Fredon’s integration, demonstrating proactive financial stewardship.
Outlook and Strategic Momentum
Looking ahead, NRW’s outlook remains positive with a total project pipeline valued at $25.2 billion, including $9.2 billion in active tenders. Each segment is well positioned to secure near-term opportunities, supported by strong market fundamentals such as infrastructure investment in Western Australia, resilient housing demand in Queensland, and growing activity in battery metals and energy transition sectors.
Fredon’s integration is progressing smoothly, with expectations of substantial growth driven by repeat business and emerging sectors like defence and renewables. NRW’s commitment to sustainability and emissions reduction also aligns with evolving client and regulatory expectations, adding a strategic dimension to its growth trajectory.
Bottom Line?
NRW’s strategic acquisition and diversified project pipeline set the stage for sustained growth, but investors will watch closely how integration and market conditions unfold.
Questions in the middle?
- How will NRW manage the increased debt load from the Fredon acquisition in the medium term?
- What impact will the underperforming Queensland Civil contract have on future segment profitability?
- Can NRW’s MET segment capitalize on international expansion opportunities, particularly in North America?