COSOL Limited’s interim results reveal a 14.1% revenue decline and a net loss of $290,563 for H1 2026, reflecting subdued market conditions and ongoing investments in digital services. The company signs new US contracts while restructuring to position for growth.
- Revenue down 14.1% to $49.63 million
- Net loss of $290,563 versus prior profit of $4.05 million
- Underlying EBITDA falls 57% to $3.5 million
- Two new multi-year US managed services contracts signed
- Net debt reduced to $20.7 million with $14.3 million finance headroom
Interim Financial Performance
COSOL Limited (ASX: COS) has reported a challenging first half for the 2026 financial year, with revenues declining 14.1% to $49.63 million and a net loss of $290,563, a significant reversal from the $4.05 million profit recorded in the same period last year. Underlying EBITDA also contracted sharply by 57% to $3.5 million, underscoring the impact of subdued economic activity across key sectors such as mining and energy.
Market Conditions and Operational Reset
The company attributes the softer financial results to decreased demand for asset management services amid a slowdown in several core markets. Additionally, COSOL faced delays in revenue recognition from new digital and data projects, as well as costs linked to the early termination of a managed services contract and investments to bolster its sales capability in the Americas. Despite these headwinds, COSOL is actively restructuring its operating model to reduce costs and improve efficiency.
Strategic Progress and Contract Wins
On the strategic front, COSOL made notable progress by signing two new multi-year managed services contracts based in the United States, signaling confidence in its service offerings and growth potential in the North American market. The company also reported revenue growth in the public infrastructure sector, particularly transport, and has accelerated integration of its Toustone AI and data analytics business acquired in December 2024. This acquisition supports COSOL’s pivot towards digital and data-driven asset management solutions, aiming to provide clients with enhanced operational insights and efficiencies.
Balance Sheet and Cash Flow
Financially, COSOL has strengthened its balance sheet by reducing net debt from $26.6 million to $20.7 million, aided by repayments on its Westpac banking facility and a reduction in deferred consideration related to the Toustone acquisition. The company maintains $14.3 million in available finance headroom, providing flexibility to support ongoing operations and strategic initiatives. Operating cash flow improved significantly, increasing by 294% to $7.7 million, driven by improved working capital management and timely collections.
Dividend and Outlook
Reflecting the cautious outlook and focus on reinvestment, COSOL did not declare a dividend for the half-year, following a final dividend payment of 1.168 cents per share for the previous fiscal year. The company’s leadership remains focused on executing its growth strategy, leveraging its digital asset management capabilities and expanding its footprint in the Americas and public infrastructure sectors.
Bottom Line?
COSOL’s interim results highlight a transitional phase with near-term pressures but strategic investments that could underpin a recovery in the second half.
Questions in the middle?
- How will COSOL’s new US contracts translate into revenue growth in H2 2026?
- What impact will the integration of Toustone have on COSOL’s profitability and service offerings?
- Can COSOL sustain its improved cash flow and reduce debt further amid ongoing market uncertainties?