ARB (ARB) H1 2026 earnings summary

Executive summary

• Sales revenue for the half-year ended 31 December 2025 was AUD 358 million, down 1% year-over-year amid challenging new vehicle sales and constrained consumer sentiment.

• Profit before tax declined 18.8% to AUD 57.1 million, with underlying profit before tax down 16.3% after one-off items.

• Net profit after tax was AUD 42.2 million, down 17.2% year-over-year; earnings per share fell 17.9% to 50.6 cents.

• Export sales grew 8.8%, with U.S. sales up 26.1%, offsetting declines in OEM and EMEA channels.

• OEM sales dropped 38.2% due to inventory build-up and weak new vehicle sales.

Financial highlights

• Gross margin declined due to a weaker AUD/THB exchange rate and lower factory overhead recoveries.

• Materials and consumables rose to 44% of sales from 41% last year, reducing margins.

• Depreciation expense increased 16% to AUD 17.8 million due to elevated capital expenditure.

• Cash from operating activities was AUD 63.9 million, exceeding profit after tax by AUD 22.7 million; cash balance at period end was AUD 59.4 million with no debt.

• Interim fully franked dividend of AUD 0.34 per share declared, payout ratio 67.2%.

Outlook and guidance

• Sales margins in the second half of FY 2026 expected to be in line with the prior period, aided by favorable currency hedging and a recent price increase.

• Export order book is well ahead of December 2024, with continued growth expected in the U.S.

• OEM sales outlook remains subdued but may trend marginally better in 2H FY2026.

• Management expects improved financial performance in the second half, trading closer to the prior corresponding period.

• Interim dividend of 34.0 cents per share to be paid on 17 April 2026.