Multistack International Limited posted a surprising $2.26 million net profit for 2025, driven by one-off settlement income, while its core operations continue to falter, prompting plans to exit its current business model.
- Net profit of $2.26 million despite 57.5% revenue decline
- Core trading entity incurs ongoing operating losses
- Significant $4 million other income from settlements and asset disposals
- Board decides to discontinue current business and pursue disposal
- Material uncertainty over going concern status remains
A Surprising Turnaround Amid Revenue Decline
Multistack International Limited has reported a net profit of $2.26 million for the year ended 31 December 2025, reversing a loss of $1.68 million in the prior year. This turnaround comes despite a sharp 57.5% drop in revenue to just $158,888, reflecting a steep decline in sales activity, particularly in its core chiller business.
The profit was largely driven by a substantial $4 million in other income, stemming from a settlement with Danfoss and the disposal of Verdicorp’s assets to SuperLink. These one-off gains have temporarily buoyed the company’s financials, masking the underlying operational challenges.
Core Business Under Pressure
Multistack’s trading arm, Multistack Australia Pty Ltd, continued to incur losses before tax, amounting to $560,753 for the year, slightly worse than the previous year’s $502,248 loss. The company noted a significant reduction in chiller sales, with overhead costs remaining largely unchanged, squeezing margins further.
In light of these ongoing losses and the need for substantial capital injection beyond the company’s capacity, the Board has resolved to discontinue the current business model. The company is actively working towards disposing of its trading business, a process that will require shareholder approval and an independent expert’s report to comply with regulatory requirements.
Financial Position and Going Concern Concerns
Despite the reported profit, Multistack remains in a net liability position of $1.6 million, an improvement from a $3.86 million deficit the previous year but still indicative of financial fragility. The company generated positive net cash flow from operations of $1.33 million, helped by the settlement proceeds, yet faces material uncertainty regarding its ability to continue as a going concern.
Loans from director-related entities totaling over $2.3 million have been extended with undertakings not to demand repayment within 12 months, providing some breathing room. However, the final audited financial report is expected to include an emphasis of matter paragraph highlighting these going concern risks.
Risks and Future Outlook
Multistack also flagged risks around the commercialisation of its Organic Rankine Cycle (ORC) technology, which remains unproven in the market. With global and Australian economic growth expected to slow, demand for its chiller products is likely to remain subdued, compounded by competitive pressures and cautious capital expenditure by customers.
The company’s strategic pivot towards disposing of its core business signals a critical juncture. Investors will be watching closely for updates on the disposal process, the outcome of the audit, and any new directions the company may pursue.
Bottom Line?
Multistack’s 2025 profit is a financial mirage; the real test lies in its ability to restructure and survive.
Questions in the middle?
- What are the prospects and timeline for completing the disposal of Multistack Australia Pty Ltd?
- How will the company address the commercialisation challenges of its ORC technology?
- What impact will the going concern uncertainty have on investor confidence and future capital raising?