Key Highlights

  • Net Revenue increased 13.1% to $3.737 billion, supported by acquisitions including Contract Resources and Citywide Waste.
  • Underlying EBIT increased 14.2% to $470.2 million, while the underlying EBIT Margin increased 10 basis points to 12.6%.
  • Statutory NPAT declined 37.2% to $98.5 million, including $159.6 million of underlying adjustments.
  • Free Cash Flow increased 63.7% to $213.8 million, while the FY26 Dividend increased 14.2% to 6.85 cents per share.

Cleanaway Waste Management (ASX: CWY) edged +0.39% higher to $2.60 AUD today as strong free cash flow growth and underlying Earnings expansion offset concerns about the changing waste industry dynamics. The company’s FY26 results showed higher revenue, underlying EBIT and free cash flow, although statutory profit after tax declined 37.2%. The 12 months ended 30 June 2026 included contributions from recent acquisitions, improved performance in Solid Waste Services and weaker results from parts of the Environmental & Technical Solutions business.

Revenue and Earnings Growth

Cleanaway reported gross revenue of $4.371 billion, an increase of 13.5%, while net revenue rose 13.1% to $3.737 billion. The growth was supported by the acquisitions of Contract Resources and Citywide Waste, which contributed to the broader expansion in reported revenue.

Underlying EBIT increased 14.2% to $470.2 million from $411.8 million. The underlying EBIT margin increased 10 basis points to 12.6%, with pricing, labour efficiency and fleet transformation benefits contributing to the improvement.

Statutory EBIT, however, declined 12.2% to $310.6 million from $353.7 million. The statutory figure included $159.6 million of underlying adjustments, including $44.4 million of non-cash Impairment costs relating to Construction and Demolition Assets and the Investment in Circular Plastics Australia, along with other significant and non-recurring items.

Statutory NPAT Declines

Statutory NPAT attributable to ordinary Equity holders decreased 37.2% to $98.5 million from $156.9 million. Underlying NPAT moved in the opposite direction, increasing 13.6% to $223.1 million from $196.4 million.

The difference between the two measures reflects the significant adjustments recognised during FY26. The statutory result therefore declined despite the increase in underlying operating earnings.

Free cash flow increased 63.7% to $213.8 million from $130.6 million. The increase reflected higher earnings, Working Capital Management and a $40.2 million benefit from improved fleet payment terms. Total capital expenditure, including non-cash leases, was $374.3 million compared with $382.0 million in FY25.

Solid Waste Services Drives Growth

Solid Waste Services remained the largest contributor to operating earnings. Net revenue increased 6.4% to $2.506 billion, while underlying EBIT rose 9.1% to $405.0 million.

The segment’s EBIT margin increased 40 basis points to 16.2%. Contractual pricing mechanisms substantially recovered the direct cost impact of higher fuel prices, while labour and fleet efficiency and lower indirect costs also contributed.

Collections, core landfill operations and the national Container Deposit Scheme contributed to the result. Cleanaway also secured a new 7.5-year Cairns Regional Council contract, commencing in December 2026.

Mixed Performance Across Environmental Services

The Oils & Technical Services and Health Services segment recorded a 1.2% decline in revenue to $676.0 million. Underlying EBIT fell 10.7% to $75.1 million, with the margin declining 120 basis points to 11.1%.

Oils & Technical Services benefited from higher re-refined base oil prices and equipment cleaning activity, but lower hazardous waste volumes affected the second half. Health Services earnings declined following the retention of a major customer at lower rates, while a Facility outage and delays at a new product destruction facility also affected performance.

Contract Resources and Industrial Services recorded substantial growth following the Contract Resources acquisition. Revenue increased 76.9% to $669.7 million, while underlying EBIT rose 134.9% to $55.9 million.

Contract Resources contributed $319.8 million of revenue over eleven months and delivered EBIT of $36.1 million, excluding integration synergies. Lower activity in the Middle East partly offset higher project activity in Australia and New Zealand.

Dividend and FY27 Guidance

The Board declared a fully franked final dividend of 3.50 cents per share, taking total FY26 dividends to 6.85 cents per share. This represented a 14.2% increase from 6.00 cents per share in FY25 and a Payout Ratio of 68.8% of underlying NPAT.

For FY27, Cleanaway expects underlying EBIT of between $500 million and $530 million. Growth is expected from Collections, Oils & Technical Services, Health Services and Contract Resources, alongside an anticipated recovery in Middle East activity.

The company also expects higher costs associated with IT systems, technology and its BP2.0 programme. FY27 cash Capital Expenditure is expected to be approximately $360 million, while cash interest paid is forecast at approximately $140 million.

Conclusion

Cleanaway’s FY26 results combine double-digit growth in net revenue, underlying EBIT and free cash flow with a substantial decline in statutory NPAT. Solid Waste Services provided the main operating contribution, while Contract Resources added significant revenue and earnings following its acquisition. Conversely, Health Services and Industrial Services recorded weaker performance, and significant adjustments reduced statutory earnings. The FY27 outlook calls for further underlying EBIT growth to $500 million-$530 million, alongside continued investment in technology, transformation and the company’s operating platform.