Qube (ASX:QUB) management told investors it delivered a “solid” first-half result, citing a blend of organic growth and earnings from recently completed acquisitions, while also outlining a pending scheme of arrangement after a Macquarie Asset Management (MAM)-led consortium confirmed an offer of AUD 5.20 per share.
Scheme offer and timing
Managing Director Paul Digney said Qube has entered into a scheme implementation deed with the MAM-led consortium following confirmation of the AUD 5.20 per share offer. Digney described the development as “an exciting milestone” and said the offer “underscores the value of our strategy and the quality of our business.”
Safety update
Digney said the half’s safety performance was “sadly marred” by the death of a tire-fitting contractor at a Narromine Agri facility in October, adding that Qube continued to support investigations.
On other safety metrics, management said the total recordable injury rate (TRIR) improved, decreasing 21% compared with the prior year’s result, with LTIFR and SIFR also improving. Digney said the company continued to roll out its “Be Safe” program.
Divisional performance and market conditions
Digney said activity levels remained “mostly favorable” across core markets and that Qube’s diversity helped offset challenges in certain areas.
- Logistics and Infrastructure: Digney said EBITA rose about 22% for the segment, helped by the addition of Webb Dock West (also referred to as MIRRAT). However, he said AAT terminals were weaker overall due to a decline in higher-margin ancillary services. Container logistics volumes were “broadly stable” in Australia, while New Zealand performed better than expected. Digney said the Nexus acquisition completed in December is expected to provide “further New Zealand upside” in the second half. He added that IMEX improved as volumes ramped up, and that Agri performed well, with grain volumes through bulk terminals up “almost 50%.”
- Ports and Bulk: Digney described performance as mixed. Energy delivered strong earnings from oil and gas activities, including commencement of decommissioning work, but renewables profitability was impacted by setup costs in Western Australia and project delays in Queensland. He said port operations saw “reasonable volume stevedoring” but that an unfavorable product mix weighed on margins. Forestry was “relatively stable,” and resources bulk activity was better than expected, helping offset major projects ceasing and delays in new projects.
- Patrick: Digney said Patrick performed better than forecast, with market share “relatively stable at 41%.” He said EBITDA improved on higher volumes, favorable mix, and increasing ancillary revenue, and that the business extended several key customer contracts during the half.
In Q&A, management attributed weaker Ports and Bulk margins during the period to a combination of factors, including limited wind farm activity (which Digney said tends to be higher margin with fixed-cost leverage) and commodity/product mix in general stevedoring. Digney said he hoped for improvement in the second half depending on mix and operational initiatives.
Financial highlights: earnings, dividend, and non-underlying items
CFO Mark Wratten said the strong operating result contributed to a 9.8% increase in group underlying EBITDA versus the prior period. He also said the underlying EBITDA margin, excluding the “high revenue, low margin” grain trading business, improved from 10% to 10.6%.
Wratten said higher net finance costs partly offset EBITDA improvement, increasing by AUD 9 million due to higher average debt balances and no interest income on fully repaid shareholder loans to Patrick. He also said the NPAT share from associates increased by AUD 7.5 million, largely due to Patrick’s first-half performance. Underlying NPATR was AUD 157.5 million, up 10.1% versus the first half of FY2025.
The board declared an interim dividend of AUD 0.0535 per share, fully franked, payable on 9 April. Wratten said the dividend was at the top end of the board’s approved payout ratio (60%).
Wratten also outlined two “material non-underlying adjustments” in statutory results:
- AUD 101.5 million pre-tax profit on divestment of Qube’s interest in the Beverage property (sold in December 2025).
- AUD 37.3 million reversal of an onerous contract provision tied to Qube’s obligations when exiting the Minto property (divested in January 2025), which he said was successfully resolved during the period.
CapEx, balance sheet, and FY2026 outlook
Wratten said first-half FY2026 gross CapEx totaled AUD 216 million, including AUD 35 million on two acquisitions (Albany Bulk Handling in Western Australia in July and Nexus Logistics in New Zealand in December). He said Albany had been fully integrated and Nexus integration was progressing to plan. Qube also spent AUD 88 million on organic growth assets (including bulk storage facilities in Queensland and Western Australia, and mobile assets and specialized containers) and AUD 88 million on replacement CapEx. Net CapEx for the half was AUD 53 million after AUD 163 million in asset divestment proceeds, including the Beverage property and rail rolling stock described as excess to requirements.
Wratten said net debt decreased by about AUD 51 million in the half. Cash conversion excluding grain trading working capital was 71%, which he described as typical given first-half outflows that do not repeat in the second half. He said grain trading working capital movements were a positive AUD 29 million to AUD 117 million at period end. The half also included AUD 81 million in distributions from associates, mainly Patrick.
On funding, Wratten said available liquidity exceeded AUD 1.1 billion at the end of December 2025, average debt maturity was 4.4 years, and there are no facilities maturing in the second half or in FY2027. Gearing reduced to 31.6%, which he said is at the low end of the board’s approved range, and he said Qube maintains investment-grade ratings from Fitch and S&P.
Looking ahead, Digney said the FY2026 outlook across key markets is “generally favorable.” He said Patrick and New Zealand are expected to perform slightly better, while the Agri outlook could moderate due to global conditions and farmers holding inventory. He said early signs suggest improved demand for automotive ancillary services in the second half, forestry is expected to be similar to the first half, and resources should improve on better volumes and product mix, partly offsetting timing gaps as contracts end and new ones begin. In energy, oil and gas outlook remains positive, while renewable projects are delayed into next year.
At the group level, Digney said Qube expects solid underlying NPATAR and EPSA growth of 6% to 10% for FY2026.
On capital distribution under the scheme, management said the AUD 5.20 cash price would be reduced by dividends paid prior to completion, including the interim dividend. Wratten said the deed allows up to AUD 0.40 per share in dividends between signing and completion, intended to optimize franking credits, and that Qube plans to seek an ATO class ruling regarding franking credit treatment. He said a final dividend could be paid if the deal extends beyond the normal full-year results timetable; otherwise, a special dividend would likely be paid shortly before completion.
About Qube (ASX:QUB)
Qube Holdings Limited, together with its subsidiaries, provides logistics solutions for import and export supply chain in Australia, New Zealand, and internationally. The company's Operating division offers services relating to the import and export of primarily containerized cargo; provides various logistics services, which includes road and rail transport, warehousing and distribution, container parks, and related services, as well as operates intermodal logistics hubs, including rail terminals and international freight forwarding; owns and operates automotive terminals that provides automotive, general cargo, and break-bulk facilities; operates multi-user grain storage and handling facilities; and develops and operates an import-export rail terminal, and an interstate rail terminal at the Moorebank Logistics Park.
