Bhagwan Marine Reports 24% Revenue Drop, 19% EBITDA Margin Boost in 1H26
Bhagwan Marine reports a sharp 67% drop in net profit for the half-year to December 2025, while announcing a transformative $130 million acquisition of Riverside Marine Holdings.
- Revenue down 24% to $116.9 million
- Net profit after tax falls 67% to $2.9 million
- EBITDA margin improves to 19% despite lower earnings
- Strong operating cash flow up 21% to $25.4 million
- Announced $130 million Riverside Marine acquisition funded by equity raise and debt
Half-Year Financial Performance
Bhagwan Marine Limited, Australia’s largest listed marine solutions provider, revealed a challenging first half of the 2026 financial year with revenue declining 24% to $116.9 million and net profit after tax plunging 67% to $2.9 million compared to the prior corresponding period. Despite the earnings setback, the company reported an improved EBITDA margin of 19%, up from 18%, driven by disciplined cost control and enhanced vessel utilisation.
The company’s operating cash flow strengthened significantly, rising 21% to $25.4 million, reflecting higher quality earnings and effective working capital management. This robust cash generation underpins Bhagwan Marine’s financial resilience amid a softer revenue environment.
Strategic Acquisition to Boost Scale and Diversification
In a major development post-period, Bhagwan Marine announced a definitive agreement to acquire Riverside Marine Holdings Pty Ltd for up to $130 million. This acquisition, expected to complete by the end of March 2026, is set to materially enhance Bhagwan Marine’s scale, diversify its revenue streams, and increase the proportion of repeatable, contract-backed earnings.
The deal will be funded through a $30 million equity raising, including a placement and director participation, alongside a $70 million three-year debt facility arranged with the Commonwealth Bank of Australia. The acquisition structure includes an initial cash payment of $100 million and the issuance of 48.8 million shares subject to voluntary escrow arrangements, with potential earn-out payments of up to $10 million based on Riverside’s EBITDA performance.
Operational Outlook and Growth Focus
Bhagwan Marine’s management emphasised a positive outlook for the second half of FY26, focusing on margin-led earnings growth, converting a strong pipeline of opportunities across offshore energy, subsea, ports and defence sectors, and maintaining disciplined capital allocation. The integration of Riverside Marine is a key priority, with the company committed to preserving operational continuity and customer relationships while leveraging complementary capabilities.
The company continues to pursue a clear growth strategy centred on strengthening its core marine services, expanding into adjacent markets such as offshore decommissioning and offshore wind, and executing value-accretive acquisitions to improve earnings quality and free cash flow generation.
Dividend and Balance Sheet Position
Bhagwan Marine declared a fully franked interim dividend of 0.5 cents per share, consistent with the final dividend paid for the previous financial year. The company’s net tangible asset backing per share declined slightly to $0.46 from $0.52, reflecting the earnings impact and capital deployment towards growth initiatives.
While current liabilities exceeded current assets by $4.1 million at period end, the directors affirmed the company’s going concern status, supported by detailed cash flow forecasts and strong operational cash generation.
Bottom Line?
Bhagwan Marine’s upcoming Riverside acquisition marks a pivotal step, but investors will watch closely how integration and margin initiatives unfold amid earnings headwinds.
Questions in the middle?
- How will the Riverside Marine acquisition impact Bhagwan Marine’s earnings and cash flow in FY27?
- What risks could arise from the increased debt facility supporting the acquisition?
- Can Bhagwan Marine sustain margin improvements and convert its strong project pipeline into contracted revenue?
