Matrix FY25 Revenue Falls 12% to $74.8M; SURF Segment Hits Record

Mixed FY25 Performance Reflects Sector Dynamics

Matrix Composites & Engineering Ltd (ASX, MCE) has released its financial results for the year ended 30 June 2025, revealing a nuanced picture of growth and challenge. The company’s total revenue fell by around 12% to $74.8 million, primarily due to a subdued drilling market that failed to meet expectations. However, this downturn was offset by a record year in the Subsea Umbilicals Risers and Flowlines (SURF) segment, which grew revenue by more than 11%, further solidifying Matrix’s market position.

Chief Executive Officer Aaron Begley highlighted the variability within the subsea business, noting that while drilling activity was weaker, the SURF market remained robust. This divergence shaped the company’s financial outcomes, with second-half revenue dropping to $35.4 million from $39.4 million in the first half. Despite these headwinds, Matrix maintained positive operating earnings and disciplined cost management, delivering an EBITDA of $7.8 million, though underlying EBITDA adjusted for non-operating items was $5.0 million, down from $11.0 million the previous year.

Order Book and Cash Position Signal Momentum

Matrix ended FY25 with a net loss after tax of $2.2 million, a reversal from the $3.6 million profit recorded in FY24. The loss was concentrated in the second half of the year, reflecting the impact of the drilling market slowdown. Nevertheless, the company’s cash position remains solid with $18.3 million on hand and no long-term debt, underscoring a strong balance sheet.

Looking ahead, Matrix has secured approximately $57 million in subsea contracts for FY26, including $45 million in new SURF awards announced in July. This robust order book provides a strong foundation for growth and reflects the company’s increasing qualification profile and market share in the subsea sector. Additionally, Matrix is actively pursuing a pipeline of opportunities valued at around $300 million in the SURF market and $75 million in the drilling sector, although customer procurement urgency remains cautious.

Emerging Growth Areas and Strategic Outlook

Beyond subsea, Matrix’s Advanced Materials division, which includes well construction and defence-related work, continues to develop with $4.5 million in revenue. The company’s Corrosion Technologies business contributes steady recurring revenue, supporting diversification and resilience. Matrix’s strategic positioning in the growing defence precinct of Henderson, Western Australia, and its advanced material capabilities, are expected to underpin longer-term growth prospects.

CEO Aaron Begley expressed confidence in the company’s trajectory, emphasizing the buoyant levels of project activity and the potential for further contract awards over the next 6 to 12 months. The combination of a strong order book, emerging advanced materials opportunities, and a disciplined approach to execution and cost management positions Matrix well to navigate sector fluctuations and capitalize on growth in energy, mining, and defence markets.