Austin Engineering Reports 12.7% Revenue Decline, $19.3 Million EBITDA in FY26

Sharp Earnings Decline Masks Operational Reset Progress

Austin Engineering Limited (ASX:ANG) reported a challenging FY26 with Group revenue down 12.7% to $329 million and EBITDA slashed by more than half to $19.3 million. The plunge was largely driven by operational difficulties in the Americas, including a legacy loss-making OEM contract in Chile that weighed heavily on South American earnings.

Despite these setbacks, the company’s operating cash flow surged to $26.7 million from a mere $2.6 million in FY25, reflecting disciplined working capital management and tighter financial controls. Net debt was reduced to $5.8 million, bolstering balance sheet flexibility ahead of the operational reset planned for FY27.

Regional Performance Diverges Amid Reset Efforts

The Asia Pacific region remained Austin’s largest revenue contributor, accounting for 44.7% of Group revenue at $147.1 million, though it faced a 15.1% decline due to softer tray volumes. This was partly offset by a robust 117.5% increase in bucket sales, particularly in Australia where bucket revenue jumped $17.4 million, now representing 26.1% of APAC product revenue. The region also diversified its customer base, with non-single-customer work rising to 51%, supporting earnings resilience.

North America saw a 13.5% revenue drop to $127 million amid slower customer replacement cycles and product mix challenges. However, a comprehensive Operational Improvement Plan drove workshop productivity from 62% in July 2025 to approximately 80% by FY26’s final quarter. The appointment of a Vice President Americas unified oversight of North and South American operations, aiming to sustain efficiency gains into FY27.

South America, primarily Chile, reported a 3% revenue decline to $54.9 million and an EBITDA loss that widened to $10 million. The legacy OEM contract, secured in 2024, was renegotiated in March 2026 with improved pricing and payment terms, and deliveries commenced under the revised terms in late June. Operational improvements including leadership changes, workforce rightsizing, and tighter cost controls are expected to underpin a turnaround in FY27.

Safety and Sustainability Gains Offset Financial Pressures

Alongside financial challenges, Austin made notable progress in safety and sustainability. The Lost Time Injury Frequency Rate (LTIFR) halved to 2.0, and Total Recordable Injury Frequency Rate (TRIFR) dropped by 36.7%, reflecting strengthened safety systems globally. Greenhouse gas emissions fell 24%, driven by reductions in Scope 1 and Scope 2 emissions, aligning with the company’s commitment to environmental stewardship.

Product innovation remained a focus, with the rollout of the austIQ digital platform providing real-time equipment health insights across customer fleets. The partnership with US-based Bierwith Forge led to the introduction of an innovative dipper bucket, enhancing Austin’s competitive edge in mining equipment solutions.

Capital Management and Leadership Stability

The Board declared a fully franked interim dividend of 0.3 cents per share but withheld a final dividend to preserve capital for the operational reset and FY27 execution. Leadership changes included Sybrandt van Dyk’s first full year as CEO and the appointment of Ian Stone as Non-Executive Director and Chair of the Audit & Risk Committee, bringing financial services expertise to the Board.

Following year-end, Austin refinanced its banking facilities, extending the term to November 2029 with improved terms, signaling lender confidence in the company’s strategy and operational reset. The company also maintained a share buy-back program to manage capital efficiently.

FY27 Outlook Hinges on Execution of Operational Improvements

Austin enters FY27 as a leaner, more disciplined business with a clearer operating platform. The company expects underlying EBIT (excluding foreign exchange movements) between $17 million and $21 million, reflecting cautious optimism as operational improvements take hold.

Key priorities include completing the turnaround in Chile and North America, capitalising on strong demand in APAC, embedding operational improvements into standard processes, and expanding spare parts growth. The continued maturation of the austIQ platform is expected to deepen customer relationships and support equipment lifecycle management.

While the legacy OEM contract in Chile no longer drags on profitability, the pace of recovery remains contingent on execution and market conditions. The company’s ability to convert operational gains into sustained profitable growth will be closely watched by investors as FY27 unfolds.