• 1H FY26 EBITDA impacted by frac schedule change at key customer and rising costs in international Water Technologies business
• Decisive action taken to address challenges, including transition to lower-cost channel partner model in international Water Technologies
• Expect stronger 2H FY26 revenue and earnings, supported by growth initiatives and cost reduction measures

SciDev Ltd (ASX:SDV) reported financial results for the first half of FY26, reflecting a period of challenging conditions but with a clear plan forward for recovery. The company's Managing Director and CEO, Sean Halpin, stated that the result was primarily impacted by two specific issues: a frac schedule change at a key US customer which reduced premium product volumes, and rising costs in the international Water Technologies business that outpaced revenue growth. To address these challenges, SciDev has taken decisive action. In international Water Technologies, the company is transitioning from a direct investment model to a lower-cost channel partner strategy, which is expected to reduce costs by nearly $3 million per annum while maintaining and expanding market access. Additionally, the company has taken steps to broaden its revenue base in Energy Services, increasing the number of clients buying its CatChek® product by 75% over the prior year.Despite the headline numbers, underlying EBITDA in all other business divisions and at the corporate level improved over the prior year. The company's Process Chemistry business delivered record revenues in 1H FY26, while the domestic Water Technologies business returned to profitability. Looking ahead, SciDev is focused on growing its recurring revenue base from stable business lines, including long-term Process Chemistry contracts, O&M contracts, and sales from its proprietary CatChek® product. The company will also continue to drive forward on several key initiatives, such as R&D for advanced specialty chemicals, cross-selling Water Technologies services, and expanding long-term MSAs and O&M contracts.For FY26, the company has revised its revenue guidance to $100 million to $110 million, reflecting a delay in sales opportunities for xSlik® and delays in trial conversions in Process Chemistry, as well as the negative impact of a higher AUD:USD exchange rate. However, SciDev expects 2H FY26 EBITDA to be higher than 2H FY25, supported by stronger revenue expectations and the benefits of recent cost reduction initiatives.

FY26 revenue guidance revised to $100 million to $110 million, reflecting delays in sales opportunities and trial conversions, as well as the negative impact of a higher AUD:USD exchange rate. 2H FY26 EBITDA expected to be higher than 2H FY25, supported by stronger revenue expectations and the benefits of recent cost reduction initiatives.

SciDev is focused on growing its recurring revenue base from stable business lines, including long-term Process Chemistry contracts, O&M contracts, and sales from its proprietary CatChek® product. The company will also continue to drive forward on several key initiatives, such as R&D for advanced specialty chemicals, cross-selling Water Technologies services, and expanding long-term MSAs and O&M contracts.