Rubicon Water reported a 9.4% revenue decline to $29 million and a net loss of $6.4 million in the first half of FY26, driven by a sharp drop in ANZ hardware sales. The company anticipates a rebound in Asia in the second half, despite ongoing foreign exchange headwinds.
- Revenue down 9.4% to $29 million, led by 23% fall in ANZ segment
- Underlying EBITDA loss widened to $5.85 million from $1.69 million
- Net loss after tax surged 344% to $6.4 million
- Foreign exchange movements contributed $2.1 million negative impact
- Cash reserves at $2.76 million with $6.34 million undrawn debt facilities
Revenue Pressure in ANZ Segment
Rubicon Water Limited’s half-year results for the six months ended 31 December 2025 reveal a challenging operating environment. The company’s revenue declined by 9.4% to $29 million, primarily due to a 23% slump in the Australia and New Zealand (ANZ) segment. This drop was largely attributed to lower sales of hardware and spare parts, signaling softness in its core market.
Widening Losses and EBITDA Decline
The company’s underlying EBITDA loss widened significantly to $5.85 million, compared to a loss of $1.69 million in the previous corresponding period. This deterioration reflects the revenue decline compounded by increased depreciation expenses. Rubicon’s net loss after tax ballooned by 344.4% to $6.4 million, underscoring the financial strain the company is under.
Foreign Exchange and Segment Performance
Foreign exchange movements also weighed heavily on the result, with an unrealised foreign exchange loss of $0.3 million in HY26 compared to a $1.7 million gain in HY25. This $2.1 million negative swing was driven by a stronger Australian dollar, which impacted the company’s international earnings. While the Rest of World segment remained stable, buoyed by increased activity in Europe offsetting US project delays, the Asia segment experienced softness but is expected to recover in the second half of the year.
Liquidity and Debt Facilities
Rubicon’s liquidity position remains a focal point. The company held $2.76 million in cash at the end of December 2025, down from $5.5 million six months earlier. However, it has access to $6.34 million in undrawn debt facilities and met all financial covenants at the reporting date. The company’s banking facilities, primarily with HSBC, include a mix of perpetual and term loans, with the term facility expiring in August 2026. Management expressed confidence in the company’s ability to continue as a going concern, supported by operational forecasts and expected cash flows, particularly from the Asia segment.
Outlook and Strategic Considerations
Rubicon Water did not declare any dividends for the period, reflecting its focus on stabilising the business. The company’s joint venture in India and China, Medha Rubicon Water Technologies, continues to be a key part of its international strategy, although some aged receivables remain a collection risk. The company’s executive team holds a significant number of performance rights, aligning management incentives with future performance milestones. Investors will be watching closely for signs of recovery in Asia and improvements in cash flow in the coming quarters.
Bottom Line?
Rubicon’s HY26 results highlight operational headwinds and currency challenges, but the anticipated Asia rebound could be pivotal for its turnaround.
Questions in the middle?
- Will the Asia segment recovery materialize as forecasted in HY27?
- How will ongoing foreign exchange volatility affect future earnings?
- What strategies will Rubicon deploy to address the ANZ hardware sales decline?