AoFrio’s nine-month revenue fell 20% to NZ$50.3 million as motor sales plunged, while EBITDA dropped to NZ$0.8 million. The NZX-listed refrigeration technology company is relying on new US bottler orders, Food Retail expansion and its IoT platform to support a more profitable 2027.
- Nine-month revenue down 20% to NZ$50.3 million
- Motors revenue fell 43.7% to NZ$16.5 million
- IoT revenue broadly stable at NZ$33.8 million
- First SCS 800 and AoFrio iQ orders secured from major US bottlers
- FY2026 outlook points to NZ$73 million revenue and NZ$3 million EBITDA
Motor Sales Drive Revenue and EBITDA Decline
AoFrio Limited (NZX:AOF) has put a number on the damage from its weakening motor business: nine-month revenue fell 20% to NZ$50.3 million, while EBITDA dropped to NZ$0.8 million from NZ$2.7 million a year earlier.
The decline was concentrated in motors, where revenue fell 43.7% to NZ$16.5 million. AoFrio said its largest US motor customer shifted to local sourcing because of higher tariffs, while other customers moved towards lower-specification, lower-cost products. The company’s chair, John Scott, described the business as being “in transition” and said motor revenue continued to disappoint.
The result extends the pressure outlined in AoFrio’s first-half tariff impact, which reported a 21.5% revenue decline and a halving of motor sales in the first six months. Gross profit from motors has now fallen to NZ$3.3 million from NZ$5.5 million, although the shift towards IoT lifted overall gross margin to 34.4% from 31.3%.
IoT Revenue Holds While New US Orders Arrive
IoT revenue provided the steadier part of the portfolio, rising slightly to NZ$33.8 million for the nine months from NZ$33.6 million. Within that figure, revenue from SCS 800 and Gateway cellular connectivity devices reached NZ$3.2 million, or about 9.5% of IoT revenue.
AoFrio received its first purchase orders from major US bottlers for the SCS 800 cellular controller and AoFrio iQ insights platform during the third quarter. More than 30 customers have been onboarded to AoFrio iQ through early pilots, and the company expects cellular revenue to increase significantly in 2027 if proof-of-concept trials convert into commercial orders.
The products launched commercially in June, with a stated addressable market of 700,000 units a year across the US and Europe. AoFrio has also added tiered pricing to AoFrio iQ and launched Ask iQ, an AI-enabled feature that allows customers to query refrigeration fleet data in plain language. The early orders are commercially important, but the filing still ties the larger 2027 opportunity to trial completion and successful conversion.
Food Retail Rollout Adds a Second Growth Route
AoFrio is also building a separate Food Retail business around temperature monitoring, automated alerts and digital compliance records. Its initial 70-store rollout with a Latin American supermarket chain is progressing, with the customer discussing an expansion to additional stores.
Genevieve Clark has moved into the interim general manager role for Food, while AoFrio recruits sales specialists. The division is intended to operate as a stand-alone business once revenue supports that structure, adding another commercial test to the company’s growth plan after shareholders backed its 2026 growth capital raise.
Fourth Quarter Must Carry a Heavy Burden
AoFrio expects FY2026 revenue of about NZ$73 million and EBITDA of approximately NZ$3 million, implying fourth-quarter revenue of roughly NZ$22.7 million and EBITDA of NZ$2.2 million. That would make the final quarter materially stronger than the nine-month run rate, although the company cautioned that bottler budgets and OEM supplier decisions are typically finalised late in the year.
Management is responding to the motor weakness by sourcing lower-cost components for its existing specification and developing a new lower-cost motor, with both initiatives expected to take effect in early 2027. The immediate question is whether the replacement motor strategy can restore volume without eroding margins, while the parallel IoT plan depends on US trials becoming repeatable commercial deployments.
Bottom Line?
AoFrio’s 2027 case now rests on converting early IoT orders and pilots into recurring revenue while repairing a motor business damaged by tariffs and lower-cost demand.
Questions in the middle?
- How many of the US bottler proof-of-concept trials will convert into commercial SCS 800 and AoFrio iQ orders?
- Can the lower-cost motor initiatives regain demand without reversing the recent improvement in gross margin?
- Will the 70-store Latin American Food Retail rollout expand quickly enough to become a meaningful second growth engine?