Bhagwan Marine Ltd Posts FY26 Results With 20% EBITDA Margin, Dividend Up 60%

Bhagwan Marine delivers 20% EBITDA margin and 60% dividend growth in FY26 results

In its FY26 Full Year Results Presentation, released 27 August 2026, Bhagwan Marine (ASX: BWN) outlined a year defined by margin expansion, stronger cash generation and a substantial lift in shareholder returns.

Management reported an EBITDA margin of 20%, up from 18% in FY25, alongside net cash from operations of $40.0m, an increase of 9.6%. The fully franked total dividend rose to 0.8 cents per share (cps), representing 60% dividend growth.

The FY26 margin expansion follows a pattern established through the year: Bhagwan’s 1H26 interim results already showed the EBITDA margin climbing to 19% despite an 8.5% revenue decline, with operating cash flow up 21% and net financial debt reduced to just $1.0m ahead of the Riverside transaction.

Net revenue came in at $235.9m, down 16.6% on the FY25 figure of $283.0m. The presentation framed this decline as a reflection of the completed one-off Thevenard Island (TVI) decommissioning project, with those earnings replaced by recurring revenue from the newly acquired Riverside Marine business.

Bhagwan operates as an integrated marine services provider with a fleet of 70+ owned vessels positioned at key marine hubs nationally. The company recorded a 4-year revenue CAGR of 15%, and management pointed to the combination of higher margins and stronger cash conversion as evidence of a higher-quality, more recurring earnings base despite the lower headline revenue.

A snapshot of the FY26 numbers

The presentation detailed the group’s headline financials across the period.

Management highlighted several operational achievements across the year:

• Secured a five-year contract with Jadestone Energy for Coral Knight (announced 3 December 2025)

• Completed the transformational Riverside Marine acquisition on 31 March 2026, with integration progressing on track

• Strategic acquisition of the Bhagwan Ocean multi-cat vessel (approximately $6m)

• Added decommissioning projects, initial wind farm survey work and expanded defence presence

These wins, spanning contracted and recurring revenue, were presented as underpinning future earnings visibility.

The Riverside Marine acquisition reshapes the earnings base

The presentation positioned the Riverside Marine acquisition, completed on 31 March 2026, as a transformational step in reshaping the group’s earnings profile.

Riverside recorded full-year revenue of $60.0m in FY26. Reflecting the 31 March completion date, only $15.1m of this was consolidated into Bhagwan’s FY26 result. On a pro forma basis, 4Q FY26 revenue rose 17% on the prior comparable period, while 4Q FY26 EBITDA rose 30%.

Riverside delivered an EBITDA margin of 40.8% in FY26, up from 39.3% in FY25, with 94% long-term recurring revenue for the year. Management noted these characteristics lift the overall quality of the group and provide opportunities to amplify growth across the combined business.

Riverside’s capital-light vessel management model, which requires sustaining capex of only 30-35% of EBITDA compared with 50-70% for asset-heavy maritime operators, is a key reason the business contributes such a disproportionately high margin relative to its revenue share.

Riverside operates across five established brands:

1. Rivtow Marine — harbour and towage services

2. AIMS Vessel Management — government research vessels

3. Riverside Industrial Sands — construction sand in Brisbane

4. Magnetic Island Ferries — sole commercial ferry operator linking Townsville and Magnetic Island

5. Riverside Oceanic — charter vessels

Recurring revenue now 56% of the total

A central theme of the presentation was the shift toward recurring revenue as a proportion of the total. Recurring revenue rose to 56% in FY26, up from 44% in FY25, and reached 62% on a pro forma annualised basis.

Long-term revenue from contracts extending beyond 12 months grew to $67.2m, up from $52.8m in FY25. Management also noted that short-term projects recovered during May and June. A higher recurring mix supports greater earnings visibility and resilience.

What “power of incumbency” means for investors

Integrated marine services cover a range of activities that support offshore and port-based operations. Bhagwan’s four service lines span marine services, subsea services, vessel charters and project delivery, offering clients end-to-end solutions.

Being the established incumbent at a key port or marine hub can create a durable competitive advantage. Longstanding client relationships, physical positioning and a consistent flow of opportunities are harder for new entrants to replicate. The presentation noted that Bhagwan generates approximately $50m in revenue per annum from its marine hub presence and approximately $70m per annum from long-term contracts.

Recurring revenue differs from spot or short-term project work. Spot work typically lasts less than two weeks and can be volatile, while recurring long-term contracts run beyond 12 months. Investors tend to value recurring income more highly because it offers greater predictability and earnings visibility.

Bhagwan’s four integrated service lines are:

• Marine Services

• Subsea Services

• Vessel Charters

• Project Delivery

Balance sheet positioned to fund the next phase of growth

The presentation addressed the increase in net debt, framing it as growth-oriented rather than a sign of financial stress. Closing net debt for FY26 stood at $74.5m, up from an opening position of $5.3m, driven mainly by acquisitions ($94.1m net of cash) and growth capital expenditure.

The company raised $28.7m in capital during the year. Leverage sat at 1.2x on an annualised basis, gearing at 34% and interest cover at 11.7x. Net tangible assets stood at 42cps, with pro forma free cash flow of $8.3m and strong cash conversion of 90%.

From the FY26 presentation

“Net debt increased to fund the Riverside acquisition and fleet expansion, while the balance sheet remains conservatively positioned at 1.2x leverage (annualised) 34% gearing and 11.7x interest cover – leaving ample headroom to fund the next phase of growth.”

The framing positions the additional debt as funding an expanded asset base and future earnings, with headroom retained for continued growth.

Industry tailwinds and the outlook

The presentation set out the medium-term opportunity using several industry drivers. Management pointed to a supply-demand imbalance within the marine sector, with limited new vessel builds since 2015 supporting rates and asset values over time.

Offshore support vessel (OSV) utilisation and rate indices were shown trending favourably, drawing on Clarksons Research data. The presentation also identified blue-sky opportunities across decommissioning, defence and offshore power linked to the energy transition, describing these as providing upside beyond the core investment case.

Management summarised the year with five key takeaways:

1. Increasing recurring revenue and profitability, supported by strong cash generation

2. Incumbency at key marine hubs plus enhanced business development capability supporting organic growth

3. Riverside Marine integration on track, with opportunities to increase volumes, utilisation and earnings

4. Well positioned to capture blue-sky growth driven by the energy transition, decommissioning and defence

5. Positive industry fundamentals supporting pricing and long-term asset values

With a larger, higher-margin fleet, an enlarged recurring revenue base and structural industry tailwinds, the presentation framed Bhagwan Marine as positioned to pursue the next phase of growth across its core, organic and acquisitive pathways.

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