Bhagwan Marine finds early FY27 lift in subsea and Riverside operations

• Q1 FY27 revenue of $81.3 million, up 32% year on year
• Recurring revenue increased to 64% from 62% on a FY26 pro forma annualised basis
• Two subsea contracts secured with combined value of approximately $9.5 million
• Riverside Guardian contract carries a minimum value of approximately $5.8 million
• AGM proxy support exceeded 99.2% across the seven resolutions

Q1 Revenue Gains Momentum

Bhagwan Marine Limited (ASX:BWN) has opened FY27 with a sharp rise in activity, reporting group revenue of $81.3 million for the first quarter. That was 32% above the prior corresponding period and 14% higher than the June quarter, with the company pointing to strong contributions from high-margin Offshore Energy & Resources subsea work and Riverside Industrial Sands.

The quarter also marked a further shift towards recurring income. Bhagwan said recurring revenue reached 64%, up from 62% on a FY26 pro forma annualised basis, while momentum seen late in FY26 continued into the new financial year. Riverside Marine, acquired in the previous quarter, contributed to the group result and was itself reported to be performing above internal expectations.

Subsea Awards Add Near-Term Work

Two subsea service contracts secured during the quarter have a combined value of approximately $9.5 million. Mobilisation is scheduled between August and November 2026, with Bhagwan to provide diving and subsea inspection services using the 57-metre Bhagwan Dryden, a purpose-built remotely operated vehicle and air dive support vessel.

The company’s latest update also puts the Riverside acquisition to work commercially. The

Riverside Sands Strengthens the Mix

Riverside Industrial Sands delivered what Bhagwan described as a record first quarter, with double-digit volume growth against both the previous quarter and the prior corresponding period. The business supplies construction sand in Brisbane using two purpose-built dredging vessels and has agreements with major concrete producers with average tenures of eight to 10 years.

Bhagwan attributed the performance to strong industry demand, customer and contract mix, and competitive cost advantages. It also said production constraints at a key competitor provided additional near-term benefits. Demand is expected by the company to remain supported by the 2032 Brisbane Olympics, major infrastructure projects and housing, although the presentation’s forward-looking statements remain subject to market and execution risks.

AGM Backs Incentive Proposals

The AGM materials showed more than 99.2% proxy support for each of the seven resolutions, including Andrew Wackett’s re-election and the employee incentive plan. Proxy support was also above 99.2% for proposed performance rights of 674,788 to managing director and chief executive Loui Kannikoski, 457,590 to Wackett, 238,356 to general manager corporate services Kerren Kannikoski and 215,154 to general manager WA operations Tom Kannikoski.

Those figures are proxy votes received before the meeting rather than the final poll result, which Bhagwan said would be released after the AGM. The vote sits alongside a FY26 chairman’s assessment that revenue was $236.3 million, EBITDA margin was 20% and operating cash flow was $40.0 million, despite project deferrals linked to the Middle East conflict and energy-sector restructuring in the second half.

The more immediate test is whether the strong first quarter converts into sustained earnings growth. Bhagwan is now carrying a larger fleet, a broader operating base and a growing book of recurring work, but the timing of decommissioning, defence and offshore power opportunities remains dependent on regulatory processes, client decisions and market conditions. Subsequent quarters will show whether Q1 was the beginning of a durable step-up or an unusually favourable opening period.

Bottom Line?

The Q1 figures are encouraging, but the next proof point is execution: sustained margins, successful contract mobilisation and continued integration of Riverside Marine.

Questions in the middle?

• Can Bhagwan maintain the 64% recurring-revenue ratio as short-term and project revenue fluctuate?
• How quickly will the new subsea awards and Riverside Guardian deployment contribute to earnings and fleet utilisation?
• Will decommissioning and defence opportunities move from a promising pipeline into contracted revenue?