Derivative Losses and FIRB Delays Cloud TPC Consolidated’s Strong Half-Year Results
TPC Consolidated Limited reported a 4.1% revenue increase to $103.6 million and a 62% jump in underlying EBITDA for the half-year ended December 2025, while the proposed acquisition scheme faces regulatory hurdles.
- Revenue rises 4.1% to $103.6 million
- Underlying EBITDA surges 62% to $6.5 million
- Underlying profit before tax up 70.9% to $6 million
- Net profit after tax declines due to derivative fair value adjustments
- Interim fully franked dividend of 20 cents per share declared
- Scheme of arrangement with Wollar Solar Holding remains uncertain pending FIRB approval
Financial Performance Highlights
TPC Consolidated Limited has delivered a solid first half for the 2026 financial year, with group revenue climbing 4.1% to $103.6 million. The company’s underlying earnings before interest, tax, depreciation and amortisation (EBITDA) surged 62% to $6.5 million, reflecting improved operational efficiency and favourable market conditions.
Underlying profit before tax rose sharply by 70.9% to $6 million, signalling robust core business momentum. However, net profit after tax (NPAT) fell to $3.4 million, down from $4.7 million in the prior period, primarily due to adverse fair value movements on derivatives used for hedge accounting. This accounting volatility underscores the challenges energy retailers face amid fluctuating wholesale energy prices.
Balance Sheet and Dividend
TPC’s balance sheet remains resilient, with cash and bank deposits steady at $24.3 million, including $12.3 million held as security for bank facilities. Net tangible assets per share declined to 234 cents from 311 cents, reflecting derivative valuation impacts.
In a vote of confidence, the board declared a fully franked interim dividend of 20 cents per share, payable on 20 March 2026. This dividend reflects management’s positive outlook on the company’s long-term prospects despite short-term earnings fluctuations.
Market Conditions and Strategic Initiatives
The half-year saw volatile wholesale electricity prices, including extreme spikes in New South Wales and South Australia due to weather and network constraints. Yet, overall market prices were more subdued compared to the previous year, aiding margin expansion.
TPC is actively exploring growth avenues aligned with the energy transition, including launching a Virtual Power Plant (VPP) product to capitalise on increasing household solar and battery adoption. The company welcomes government initiatives such as the nationwide battery subsidy program, which supports grid resilience and consumer energy flexibility.
Scheme of Arrangement Status
On the corporate front, TPC’s proposed acquisition by Wollar Solar Holding Pty Ltd, a subsidiary of Beijing Energy International, remains in limbo. The scheme of arrangement requires Foreign Investment Review Board (FIRB) approval, which was not secured by the 28 November 2025 sunset date. This regulatory hurdle casts uncertainty over the transaction’s completion and future ownership structure.
Management has acknowledged the possibility of termination of the scheme if conditions are not met, underscoring the importance of regulatory developments for shareholders and market participants.
Looking Ahead
Despite sector challenges, TPC’s strong financial position and strategic initiatives position it well to navigate ongoing market volatility. The company aims to sustain sales growth and margin improvements in the second half of FY26, leveraging its operational strengths and emerging product offerings.
Bottom Line?
TPC’s strong operational gains are tempered by regulatory uncertainty and derivative volatility, setting the stage for a pivotal second half.
Questions in the middle?
- Will the FIRB approval for the Wollar Solar acquisition be granted or will the scheme be terminated?
- How will derivative fair value fluctuations continue to impact TPC’s earnings volatility?
- What market reception and financial impact will the new Virtual Power Plant product have?
