Rubicon Water reports a 9% revenue decline and widening EBITDA loss in H1 FY26, offset by record European contracts and new corporate-funded projects, setting the stage for a stronger second half.
- H1 FY26 revenue down 9% to A$29.0m due to stronger Australian dollar and US funding delays
- Underlying EBITDA loss widened to A$5.9m, impacted by FX and tariffs
- Record European contract signings of A$6.9m and strong Latin American growth
- First direct corporate-funded contract secured in the US worth A$2.3m
- New floodplain management project in Australia opens scalable global opportunity
Challenging First Half Amid External Headwinds
Australian water technology firm Rubicon Water Limited (ASX: RWL) has reported a mixed set of results for the first half of fiscal 2026. Revenue declined 9% to A$29.0 million compared to the prior corresponding period, primarily due to a stronger Australian dollar and delays in US government funding. These factors also contributed to an underlying EBITDA loss of A$5.9 million, a significant deterioration from the previous year.
CEO Bruce Rodgerson acknowledged these headwinds as largely outside the company’s control but emphasised that the delayed US projects remain approved and are expected to proceed once funding resumes. The company also faced margin pressure from US tariffs and a lack of new priced contracts in the first half, which further impacted profitability.
Record Contract Wins Signal Growth Potential
Despite the setbacks, Rubicon demonstrated strong momentum in key international markets. European contract signings hit a record A$6.9 million for the half, with Italy and Spain contributing major irrigation network projects. Latin America also showed robust growth, with significant contracts secured in Chile and Costa Rica, including the largest Latin American contract to date in Costa Rica’s Guanacaste region.
Notably, Rubicon secured its first direct corporate-funded contract in the US, valued at A$2.3 million. This milestone validates a new funding avenue beyond traditional government projects, tapping into corporate ESG and water sustainability initiatives. The company is also expanding into floodplain management, with a recent A$2.7 million contract in Australia’s Murray-Darling Basin, marking a promising new market segment with global scalability.
Outlook Brightens on Strong Pipeline and Tender Activity
Looking ahead, Rubicon expects a materially stronger second half of FY26. The company has already contracted A$9.3 million in new work for H2, more than double the prior corresponding period, and is actively tendering for projects with a combined potential value exceeding A$30 million. This pipeline includes major projects across multiple regions and sectors, supported by emerging opportunities in floodplain management and corporate-funded initiatives.
Rubicon’s strategic diversification and international expansion efforts appear to be bearing fruit, positioning it well to overcome near-term challenges. The company’s technology, demonstrated through autonomous irrigation systems and water productivity gains at reference sites in California, underscores its value proposition in a water-stressed world.
Bottom Line?
Rubicon’s H1 challenges set the stage for a pivotal second half driven by new markets and diversified funding.
Questions in the middle?
- When will US government funding resume to unlock delayed projects?
- How quickly can corporate-funded contracts scale relative to traditional government projects?
- What impact will floodplain management initiatives have on Rubicon’s long-term revenue mix?