Eneco Refresh Posts 7% Revenue Growth in Q3 FY26 Amid Rising Raw Material Costs

Revenue Growth Driven by Regional Strengths and Business Units

Eneco Refresh Limited (ASX:ERG) delivered a solid 7% increase in total revenue for the third quarter ending March 2026, matching its year-to-date growth. Western Australia led the charge with a 6% rise year-to-date, while Victoria surged 22% in the quarter and 17% year-to-date, reflecting strong demand and operational momentum. Queensland also contributed a healthy 7% quarterly growth. The Refresh Waters segment, a key revenue driver, posted a 5% lift in Q3 and a 6% increase year-to-date, signalling a successful transition from a turnaround focus to a growth-oriented strategy.

Meanwhile, the Refresh Plastics business rebounded from a quiet January to post an 11% revenue improvement year-to-date, supported by product redesigns and bespoke customer services. This performance builds on the company’s prior momentum, following a 4% revenue increase in Q2 FY26 despite rising freight costs, as detailed in its earlier quarterly update 4% revenue growth.

Operational Cost Management and Accounting Changes

Product manufacturing and operating costs eased to $2.16 million in Q3 from $2.56 million in the prior quarter, reflecting efficiency gains. Staff costs decreased slightly, though they include $32,634 in director fees. Advertising spend was reduced to $52,000, while capital expenditure on plant and equipment remained moderate at $166,000 for the quarter.

Notably, a change in accounting practice shifted custom label water revenue from the New South Wales branch to the Victorian branch, boosting Victoria’s reported revenue and slightly depressing NSW figures. This reallocation masks the underlying performance, which remains positive overall.

Emerging Cost Pressures from Middle East Conflict

The company reported that the Middle East conflict’s impact on fuel and raw material costs was minimal during the quarter but began to materialise in April with significant price increases. Eneco’s management has proactively engaged suppliers and customers to mitigate these cost pressures, with a readiness to exit unprofitable supply agreements. This cautious approach reflects a strategic shift away from loss-making contracts and a focus on sustainable profitability.

This development follows previous strategic investments in equipment and operational efficiency designed to strengthen the company’s resilience, as highlighted in its earlier quarterly results strategic investments.

Cash Flow and Financial Position Remain Solid

Eneco Refresh reported positive net operating cash flow of $570,000 for the quarter and $1.05 million year-to-date, underpinning its stable financial footing. Cash and cash equivalents increased to $4.63 million at quarter end, with no new borrowings drawn. Capital expenditure was controlled, and the company maintained zero debt facilities drawn, reflecting prudent financial management.

Payments to related parties included $33,000 in director fees, consistent with prior disclosures. The company did not report any new financing arrangements or dividends paid during the quarter.