Vysarn’s Earnings Skew and Regulatory Hurdles Pose Challenges Ahead
Vysarn Limited has reported a record first half for FY26 with revenue hitting $66.8 million and NPBT nearly doubling year-on-year to $10 million. The company reaffirms its full-year $20 million NPBT target, supported by strong industrial and advisory segment growth despite timing challenges in technology projects.
- Record 1HFY26 revenue of $66.81 million and NPBT of $10.05 million
- Industrial segment achieves record earnings driven by iron ore demand and fleet expansion
- Advisory segment expands nationally via CMP Consulting acquisition with strategic investments
- Technology segment earnings skewed to 2HFY26 but late project awards mitigate impact
- Progress on Kariyarra Water Scheme with regulatory submissions and off-take discussions ongoing
Strong Half-Year Performance Sets New Benchmark
Vysarn Limited (ASX: VYS), a specialist in water services and infrastructure, has delivered a standout first half for the 2026 financial year, posting record revenue of $66.81 million and a net profit before tax (NPBT) of $10.05 million. This represents a near doubling of NPBT compared to the prior corresponding period, underscoring the company’s growing footprint in Australia’s water infrastructure sector.
Despite an anticipated earnings skew towards the second half driven by project timing in its technology segment, Vysarn managed to mitigate this through late project awards, enabling a strong first half contribution. The company reaffirmed its full-year NPBT target of $20 million, signaling confidence in its operational momentum and project pipeline.
Industrial Segment Drives Record Earnings Amid Iron Ore Demand
The industrial segment, encompassing drilling and test pumping services, delivered a record half-year performance. Fueled by sustained demand from the iron ore sector in Western Australia’s Pilbara region, the segment capitalised on opportunities to double shift drill rigs and strategically expand its fleet. Vysarn’s focus on owning and operating dual rotary rigs is viewed as a competitive moat, with recent acquisitions and rebuilds aimed at meeting client demand and enhancing asset returns.
Management remains cautiously optimistic about maintaining this earnings run rate into the second half, while balancing rig availability and growth initiatives. The company’s commodity and geographic concentration strategy continues to target the Pilbara’s critical water challenges, positioning Vysarn as a key player in addressing regional water infrastructure needs.
Advisory Segment Expands Nationally Through CMP Acquisition
The advisory segment, bolstered by the acquisition of CMP Consulting Group, showed solid earnings aligned with expectations. The half saw significant investment in expanding CMP’s geographic footprint, with new offices established in Brisbane, Perth, and Wellington (NZ), alongside senior hires ahead of client engagements. This expansion, while incurring short-term costs, lays the groundwork for future earnings growth and cross-selling opportunities across diverse water services.
Notably, CMP’s Perth team diversified into mining projects, broadening the advisory segment’s traditional utility focus. The segment is also developing an early pipeline of international opportunities, including in New Zealand and the United States, supported by partnerships such as with Hazen and Sawyer.
Technology Segment Earnings Skewed but Pipeline Remains Robust
The technology segment experienced a delayed start to key projects, including wastewater treatment plants and managed aquifer recharge (MAR) units, resulting in an expected earnings skew to the second half. However, late awards in December 2025 helped offset this impact. The company anticipates further project awards in the second half, with the potential to replicate or exceed first half earnings.
Vysarn continues to develop its technology offerings, targeting first sales in expanded product lines such as water abstraction and downhole monitoring in the latter half of FY26. The company views MAR as a preferred water disposal method in the iron ore sector, with a strong project pipeline supporting ongoing sales.
Progress on Kariyarra Water Scheme Highlights Asset Management Potential
In asset management, Vysarn advanced its Kariyarra Water Scheme (KWS) in partnership with the Kariyarra Aboriginal Corporation RNTBC. The submission of a detailed hydrogeological assessment to regulators supports a significant groundwater license application, potentially underpinning a major bulk water supply project for Port Hedland and surrounding areas.
The company is actively engaged in commercial discussions with prospective bulk water off-takers, including the Water Corporation, and is progressing necessary environmental and land tenure approvals. While regulatory complexities remain, Vysarn targets securing key licenses, binding agreements, and funding by the end of calendar 2026.
Well-Funded and Positioned for Growth
With a strong balance sheet, positive operational cash flow, and a diversified portfolio across industrial, advisory, technology, and asset management segments, Vysarn is well positioned to execute organic growth and acquisition strategies. The company’s focus on water infrastructure in both Western Australia’s Pilbara and the Eastern Seaboard utilities market provides diversification across sectors and geographies, supporting sustainable long-term value creation.
Bottom Line?
Vysarn’s robust first half performance and strategic expansions set the stage for sustained growth, but execution on project timing and regulatory approvals will be key to maintaining momentum.
Questions in the middle?
- Will the technology segment secure the anticipated second half project awards to meet full-year NPBT targets?
- How will the regulatory process for the Kariyarra Water Scheme progress, and what are the timelines for key approvals?
- What impact will the deferred consideration and share-based payment liabilities from the CMP acquisition have on future earnings?
