Infragreen Group Limited (ASX: IFN) forecasts a robust FY26 with underlying EBITDA rising to $22.5m-$25m and underlying NPAT surging over 270%, driven by solid performances in Energybuild and Pure Environmental. The company anticipates continued momentum into FY27, despite some short-term headwinds in Minemet and Merredin Energy.
- FY26 underlying EBITDA forecast between $22.5m and $25.0m
- Underlying NPAT expected to jump 277%-336% to $6.3m-$7.3m
- Dividends from businesses forecast to more than double to $5.3m-$6.5m
- Strong second half growth in Energybuild and Pure Environmental
- Minemet and Merredin Energy face short-term challenges but maintain positive outlooks
Robust Earnings Growth Signals Momentum
Infragreen Group Limited (ASX:IFN) is on track to deliver a significant earnings uplift in FY26, with underlying EBITDA expected between $22.5 million and $25 million, marking a 21% to 35% increase over FY25. Underlying net profit after tax (NPAT) is forecast to leap by 277% to 336%, landing between $6.3 million and $7.3 million. This surge reflects a particularly strong second half, underscoring the company’s accelerating momentum across its portfolio.
Dividends from Infragreen’s underlying businesses are also set to more than double, forecast at $5.3 million to $6.5 million compared to $3 million in FY25, signaling improved cash returns to shareholders. The company has provided guidance for FY27 underlying EBITDA to grow further to between $26 million and $28 million, highlighting confidence in sustained operational performance.
Energybuild and Pure Environmental Drive Growth
Energybuild, Infragreen’s clean energy arm, posted a strong second half with sales increasing 26% to 36% compared to the first half, largely driven by higher solar and battery system installations. This translated into a swing in free cash flow from negative $0.5 million in FY25 to an expected positive range of $4 million to $5 million in FY26. The company anticipates continued growth in solar and battery deployments in FY27, reinforcing Energybuild’s role as a key earnings driver.
Similarly, Pure Environmental experienced a 10% to 20% increase in sales in the second half, supported by higher hazardous waste volumes. Free cash flow from operations more than doubled compared to the first half, with a 130% to 150% uplift. The medium-term outlook is buoyed by the Queensland Government’s renewed focus on expanding onshore oil and gas volumes within Pure Environmental’s catchment areas, with the business also completing a small acquisition in H2. These developments position Pure Environmental well to capitalize on regulatory tailwinds and market demand.
Minemet and Merredin Energy Face Short-Term Headwinds
Minemet’s second half was softer due to continued pressure on ferrous export prices, resulting in a 10% to 30% decline in free cash flow compared to the first half. However, early signs of improving ferrous prices in April and May suggest a potential rebound in FY27. The medium-term outlook remains positive, supported by the development of electric arc furnace projects across Australia and New Zealand, which could underpin demand for scrap ferrous metals.
Merredin Energy saw a slight dip in second half EBITDA due to maintenance-related operating expenses but achieved a 5% to 15% year-on-year increase in free cash flow from operations. The company expects a step-up in capacity credit payments from 2032, following the end of the current transitional pricing structure, with pricing designed to encourage new generation investment. This bodes well for Merredin’s long-term earnings potential despite near-term cost pressures.
Strategic Review Progress and Market Implications
Infragreen is advancing a strategic review with Grant Samuel, with initial findings expected to be disclosed shortly. This review aims to explore options to unlock further shareholder value amid the company’s strong operational momentum. The strategic review follows the company’s earlier announcement of this initiative to address share price disparity despite solid earnings growth and a positive business outlook, as detailed in the strategic review progress update from April.
The company’s FY26 performance builds on a track record of exceeding prospectus forecasts, with FY25 underlying EBITDA of $18.6 million already surpassing expectations. This continued outperformance reflects both organic growth and strategic acquisitions, as highlighted in the FY25 targets and IPO boost coverage from late 2025. Investors will be keen to see how the strategic review’s outcomes align with this operational momentum and whether it translates into enhanced capital management or structural changes.
Bottom Line?
Infragreen’s strong FY26 earnings trajectory and positive FY27 outlook hinge on sustained growth in clean energy and environmental services, but watch for how the strategic review might reshape shareholder returns.
Questions in the middle?
- How will the strategic review influence Infragreen’s capital allocation and shareholder value?
- Can Minemet’s improving ferrous prices sustain a meaningful earnings recovery in FY27?
- What impact will the expected capacity credit changes from 2032 have on Merredin Energy’s long-term profitability?