Bhagwan Marine Confirms FY26 EBITDA Guidance as Riverside Integration Advances

EBITDA Guidance Reaffirmed Amid Market Disruptions

Bhagwan Marine Limited (ASX:BWN) has reaffirmed its FY26 EBITDA guidance, expecting earnings between $38.5 million and $40.5 million from its core operations, excluding contributions from Riverside Marine and acquisition-related expenses. This confirmation aligns with the range disclosed in the company's May trading update, underscoring a steady finish to the financial year despite external headwinds.

The company attributes this resilience to improved EBITDA margins, rigorous cost control, and a strategic focus on free cash flow generation. Bhagwan's core marine services business demonstrated solid performance in the final two months of FY26, navigating market disruptions linked to geopolitical tensions in the Middle East and restructuring within the energy sector.

Riverside Marine Acquisition Boosts Earnings but Synergies Remain Unlocked

Riverside Marine, acquired by Bhagwan on 31 March 2026, is expected to contribute between $5.75 million and $6.25 million in EBITDA for the fourth quarter, consistent with prior guidance. For the full year on a pro forma basis, Riverside’s EBITDA is projected at $24.5 million to $25.0 million from revenues exceeding $60 million.

However, this falls short of the earlier pro forma EBITDA range of $25.2 million to $27.2 million announced in February, primarily due to the Oceanic charter business underperforming relative to expectations. This segment represents a potential revenue synergy opportunity for Bhagwan’s existing charter fleet but remains an area to watch as integration progresses.

Combined EBITDA and Financial Position Reflect Acquisition Impact

Including Riverside Marine’s fourth-quarter results, Bhagwan forecasts combined FY26 EBITDA between $44.5 million and $46.5 million, excluding acquisition costs estimated at $3.5 million to $4.5 million. These acquisition expenses reflect integration and transaction-related activities.

Net financial debt surged to $74.5 million as of 30 June 2026, up from just $1.0 million at the end of December 2025. This increase primarily stems from a $70 million debt drawdown to fund the Riverside acquisition, alongside $6 million invested in growth capital expenditure for the new Keller Ocean vessel and over $5 million in acquisition costs and interim dividend payments.

Management Emphasises Strategic Execution and Market Position

Founder and CEO Loui Kannikoski highlighted the company’s disciplined execution, margin expansion, and free cash flow generation despite challenging external conditions. He noted that medium- and long-term demand across Bhagwan’s markets remains robust, reinforcing confidence in sustainable earnings growth.

Chairman Anthony Wooles pointed to Bhagwan’s extensive multifunctional fleet and entrenched presence at key Australian marine hubs as significant competitive advantages. These factors create meaningful barriers to entry and provide a solid foundation for both core business growth and expansion into adjacent markets.