Perenti Posts Record $340M EBITA as Revenue Slips in FY26

Perenti reported record underlying EBITA of $340 million for FY26 in the same year its revenue slipped, reinstated an on-market share buyback of up to 84.5 million shares, and revealed a $20 billion tender pipeline with nearly a third of it now tied to North America.

That combination is the paradox at the centre of these results: revenue edged marginally lower, yet profitability and forward ambition both hit all-time highs.

For Australian mining services investors, this matters because Perenti is the bellwether for underground contract mining on the ASX. Its tilt toward North American Tier-1 jurisdictions, the stable, low-risk mining regions where the best-capitalised contractors win the best work, is a structural shift in where the company earns its margins, not a one-result blip.

Here is what the numbers tell you about Perenti’s financial health, whether the FY27 guidance reads as deliberate caution or an implicit earnings ceiling, and what the pipeline composition signals about the company’s next growth phase. Each of those threads points in a slightly different direction, and reading them together is where the real story sits.

Record profitability on lower revenue: how Perenti’s FY26 numbers actually read

Start with the apparent contradiction. Underlying revenue fell 1% to $3.463 billion, down from $3.490 billion in FY25. Yet underlying EBITA climbed to a record $340 million, with the EBITA margin expanding roughly 20-25 basis points to 9.8%.

Less revenue, more profit. That does not happen by accident.

The resolution sits in the segment mix. Contract Mining, the core earnings engine, generated around $2.4 billion in revenue and $291 million in EBITA. Drilling Services, the smaller division, produced approximately $843 million in revenue and a record $85 million in EBITA, growing its margins faster than the larger business it sits alongside.

What that tells you is that Perenti is actively trading lower-margin work for higher-quality contracts. This is a deliberate portfolio upgrade, not a revenue shortfall dressed up as strength.

The execution numbers back that reading. Operating cash conversion ran at approximately 97%, and adjusted free cash flow of around $182 million cleared the company’s own guidance threshold of more than $170 million. FY26 also marked the fifth consecutive year Perenti delivered results inside its stated guidance range.

Vanessa Torres, Managing Director and CEO Perenti’s management framed the result as margin growth built on a balance sheet positioned to drive future growth, pointing to record underlying EBITA achieved alongside disciplined portfolio management.

Why statutory profit looks so different

One caveat before moving on. Statutory net income came in at just $18.76 million, far below the underlying figures. That gap is largely explained by a non-cash loss of approximately $64 million recognised on the divestment of the BTP Group.

Strip out that one-off, and underlying NPATA of $192 million (up 8%) and underlying EPS of 20.5 cents (up roughly 7%) are the numbers that reflect the operating business.

For investors weighing Perenti’s earnings durability, a record EBITA on slightly softer revenue is a more meaningful signal than flat revenue growth on a static margin would have been. It points to quality over volume.

Buyback reinstated, dividends lifted: what Perenti’s capital management signals about confidence

Capital management decisions are rarely routine, and this set is not. On 23 August 2026, the board reinstated an on-market share buyback of up to 84,500,000 shares, approximately 9.03% of issued capital, authorised through 30 July 2027. Because it sits within the Corporations Act 10/12 limit, no shareholder approval is required.

ASIC’s share buyback rules set out the 10/12 limit under the Corporations Act 2001, which caps on-market repurchases at 10% of issued capital within any 12-month rolling period and removes the shareholder approval requirement that applies to larger or off-market buybacks.

Layer that on top of a dividend increase, and the board is making a specific statement about where it believes the share price sits.

The balance sheet gives it the room to make that statement. Net debt of approximately $271 million and leverage of around 0.4x was described by management as the strongest balance sheet in the company’s history. That headroom is what allows Perenti to run buybacks and higher dividends at the same time it steps into a heavier capex phase.

On dividends, the board declared a final of 4.5 cents per share, taking the full-year total to 7.75 cents per share, up 7% on FY25. The 97% cash conversion and $182 million free cash flow underwrite both moves.

Full-year FY26 dividend: 7.75 cents per share, up 7% on FY25.

The three capital management actions taken tell a consistent story:

• A dividend increase of 7%, funded by strong cash conversion
• A reinstated buyback of up to 84.5 million shares, with around 1.54 million already repurchased under the new program by 15 September 2026
• Portfolio divestments, including the BTP Group sale and AMS fleet sales, as part of a broader capital unlock

Buybacks are not new to Perenti. Across FY22 to FY24, the company repurchased 56.9 million shares at an average price of $1.05, spending roughly $54 million. That establishes buybacks as a consistent tool rather than a one-off gesture.

A board that reinstates a buyback at 0.4x leverage while lifting dividends 7% is expressing a view that the stock is undervalued relative to earnings quality, and that the balance sheet can absorb the new capex cycle without cutting shareholder returns. For income-focused investors and anyone watching capital discipline, that simultaneous move at the company’s lowest-ever leverage is a genuine confidence indicator.

A $20 billion pipeline and eight North American projects: what the backlog tells you about where Perenti is heading

Scale first. The total tender pipeline reached $20 billion, split between $8.6 billion in Australia and $6.4 billion in North America. Work in hand of $6.2 billion gives near-term revenue visibility.

Perenti’s underground contract pipeline is part of a broader wave of extensions and new awards flowing through the Australian mining services sector in 2026, with operators across the industry capitalising on sustained activity levels from gold and base metals producers.

But the size is less interesting than the direction. Trace the North American build: from effectively zero projects in FY19 to eight underway by FY26. The flagship is the A$275 million Fourmile contract with Barrick, a Tier-1 project that anchors the strategy.

Gabrielle Iwanow, President, Perenti Contract Mining North America is “the largest hard-rock underground mining market globally,” with the Fourmile contract supporting Perenti’s push into Tier-1 jurisdictions.

Then there is the commodity story. Copper-related opportunities in the pipeline nearly doubled to approximately $6.6 billion. That puts Perenti at the intersection of energy-transition metals demand and underground contract mining, which is the highest-margin corner of the market.

Management has been explicit that the pipeline is a selection pool, not a volume target. The stated criteria for pursuing work are clear:

• Projects that support sustainable total shareholder return over short-term revenue
• Tier-1, stable mining jurisdictions
• High-quality clients with long-term potential

Put the geography and the commodity mix together, and the conclusion draws itself. With $6.4 billion of pipeline in North America and copper opportunities nearly doubled, Perenti’s forward earnings mix will look materially different from its FY26 base: more geographically diversified, more commodity-diversified, and potentially carrying stronger margins per contract.

This is where the next three-to-five-year earnings story is taking shape. Tier-1 jurisdictions, energy-transition commodities, and underground work are the combination that underpins the best margins in contract mining, and Perenti is positioning its backlog squarely inside it.

FY27 guidance decoded: disciplined conservatism or a natural growth ceiling?

The FY27 numbers are where the debate lives. Perenti guided to revenue of $3.45-$3.65 billion and EBITA of $335-$355 million. The midpoint of $345 million implies only modest growth from FY26’s record $340 million. Net capex is set to rise to approximately $370 million, up from around $321 million in FY26.

Two readings compete for that guidance, and both have evidence behind them.

The conservatism argument is straightforward. This is the fifth consecutive year Perenti has delivered inside guidance, a pattern of guiding within achievable ranges. The elevated FY27 capex is driven by fleet requirements for the Bellevue and Fourmile ramp-ups, not structural cost pressure. And a planned $150 million capital unlock from the BTP divestment and AMS fleet sales partially offsets that capex step-up.

The Fourmile contract with Barrick, the flagship of Perenti’s North American push, is a hard-rock underground programme in Nevada that exemplifies the Tier-1 jurisdiction criteria the company applies when selecting which pipeline opportunities to pursue.

The ceiling argument comes largely from the broker desks. Argonaut, in a BUY-rated note dated 2 July 2026, characterised contract work as relatively flat year-on-year in FY27, with stronger growth expected in FY28. Its modelling puts earnings at an approximate 48.5%/51.5% first-half/second-half split, reinforcing the idea that FY27 is a bridge year while large contracts stabilise.

Argonaut’s read frames FY27 as a transitional year, with the large projects needing to ramp before incremental EBITA growth accelerates into FY28.

Broker sentiment overall stays constructive. Five analysts carry a “Strong Buy” aggregate recommendation, with 12-month price targets averaging approximately AUD 2.798. Post-results movements included:

• Canaccord Genuity to AUD 3.03
• Euroz Hartleys to AUD 3.10
• Macquarie to AUD 2.80
• Jefferies to AUD 2.80

The credit market agrees. Fitch Ratings affirmed Perenti at BB+ Stable on 17 March 2026, the marker underpinning the balance sheet confidence.

So which reading holds? The more useful question is not whether FY27 EBITA growth is modest, because it is. It is whether the elevated capex is building assets that generate above-average returns from FY28, which is exactly what the Argonaut thesis and the Fourmile and Bellevue ramp-up timelines together imply. The “modest growth” headline reads very differently once you hold it against $6.4 billion of North American work still to convert.

What Perenti’s FY26 result changes, and what it leaves open

Pull the four threads together and a rare combination emerges. Perenti has upgraded earnings quality, a record EBITA on lower revenue, balance sheet strength at 0.4x leverage, and strategic positioning across Tier-1 jurisdictions, North America, and copper, all in a single result. That mix usually follows a deliberate period of portfolio pruning, which is precisely what the BTP and AMS divestments represent.

Critical mineral supply gaps through 2040 are the macro backdrop against which Perenti’s copper-heavy pipeline makes most sense: miners are committing to underground development now to secure production capacity that will be needed well into the next decade.

What it does not settle is FY28. The result is the foundation for a larger growth narrative, and whether that narrative holds depends on execution rather than on finding the growth. The growth is already sitting in the $20 billion pipeline.

Three variables will decide the outcome over the next 12-18 months:

• Fourmile and Bellevue ramp-up milestones, the projects driving elevated capex
• Conversion of the $6.4 billion North American pipeline into contracted work in hand
• Whether free cash flow recovers in FY27’s second half, given the $150 million capital unlock timing

Perenti enters FY27 with the strongest balance sheet in its history, five years of within-guidance delivery, and a pipeline weighted toward the markets and commodities where contract mining margins are expanding. The FY26 result is not the story on its own. It is the base for what comes next, and you now have the framework to track whether it delivers.

This article is for informational purposes only and should not be considered financial advice. Investors should conduct their own research and consult with financial professionals before making investment decisions. Past performance does not guarantee future results. Financial projections are subject to market conditions and various risk factors, and forward-looking statements are speculative and subject to change based on market developments and company performance.