Earnings call transcript: Downer shares sink after FY2026 profit growth, softer H1 outlook

Downer Group's shares dropped 11.68% to $6.58 following its FY2026 earnings call, as investors turned their attention to a less robust first half and a heavier second half in FY2027. The company reported stronger full-year profit, with underlying NPATA rising 10% to AUD 306.7 million and statutory NPAT increasing 51% to AUD 225 million.

EBITA grew 6% to AUD 503 million. Despite these improvements, the company's FY2027 outlook includes a higher-than-usual second-half skew, with lower revenue, earnings, and EBITA margin in the first half compared to the previous year. Downer's focus on a cleaner portfolio and execution improvements was noted, with underlying EBITA margin reaching 5.1% in FY2026, up from 4.4% in FY2025.

The balance sheet also strengthened, with net debt to EBITDA falling to 0.8 times. However, management highlighted the uneven nature of the year, with first-half weakness expected to be offset by stronger second-half performance driven by projects like the Property and Asset Services defense contract.