Alfabs Surges 76% Profit, Eyes $31m Capex Boost for FY2026
Alfabs Australia Limited reported a robust 76% jump in net profit for FY2025, driven by mining equipment hire and new profit centres, while planning a significant $31 million capital expenditure for FY2026.
- Net profit after tax up 76% to $12.2 million
- EBITDA increased 39% to $27.6 million
- Fully franked dividend rises 13% to 1.7 cents per share for H2
- New workshops and profit centres expand operational capacity
- FY2026 capex planned at $31 million amid strong order book
Strong Financial Performance in FY2025
Alfabs Australia Limited has delivered a standout financial performance for the fiscal year 2025, with net profit after tax soaring 76% to $12.2 million. The company’s earnings before interest, tax, depreciation, and amortisation (EBITDA) also rose impressively by 39% to $27.6 million. This growth was underpinned by the initial hire income from the refurbishment and delivery of three development sets to the Malabar mine, which included critical underground mining equipment such as continuous miners and shuttle cars.
Alongside these gains, Alfabs declared a fully franked final dividend of 1.7 cents per share for the second half, marking a 13% increase and bringing the total dividend for FY2025 to 3.2 cents per share. This reflects a healthy 75% payout ratio, signalling confidence in the company’s cash flow and profitability.
Operational Expansion and New Profit Centres
The company has expanded its underground mining hire and workshop footprint, opening new diesel and electrical workshops in Kurri Kurri and Wollongong. This expansion supports increased demand for underground hire equipment, which has also driven growth in Alfabs’ capital expenditure book. The company’s strategy to perform more in-house servicing through its workshops is enhancing profitability, even as it reduces third-party sales.
Engineering services, both on-site and off-site, have remained robust throughout the year, with projects spanning railway stations, bridges, tunnels, and major infrastructure such as the Sydney Harbour Bridge Cycleway and Badgerys Creek Airport surrounds. Alfabs has also established a recruitment office in Sydney to bolster its talent pool and support growth initiatives.
Capex Plans and Market Outlook for FY2026
Looking ahead, Alfabs plans to invest $31 million in capital expenditure for FY2026, a significant increase aimed at supporting ongoing growth and operational capacity. This capex plan is backed by increased facilities from NAB, exceeding twice the expected spend, providing financial flexibility. While some Tier 1 project commencements have been delayed due to upstream factors, the company’s secured order book remains strong, and the tender pipeline exceeds current orders, indicating a positive outlook.
New profit centres in blasting and coating have doubled in size, with the addition of an off-site Blast & Paint division. Demand for fire-retardant stone-dust bags has also expanded following legislative changes, with Alfabs maintaining a market-leading position.
Industry Challenges and Strategic Focus
The underground coal mining sector faces headwinds from lower commodity prices and production challenges in some regions. Despite this, Alfabs continues to secure growth opportunities selectively, including acquiring dry hire assets that fit its strategic needs. The company is focused on strengthening its workforce and operational capabilities to navigate these challenges and capitalise on emerging opportunities.
Bottom Line?
Alfabs’ strong FY2025 results and ambitious capex plans set the stage for growth, but project delays and market volatility warrant close watch.
Questions in the middle?
- How will the planned $31 million capex impact Alfabs’ profitability in FY2026?
- What is the timeline for delayed Tier 1 projects and their effect on revenue recognition?
- Can Alfabs sustain growth amid ongoing challenges in the underground coal mining sector?
