• Stable operating performance in a challenging market
• Increased demand in key sectors offset by headwinds
• Continued focus on cost control and operational efficiencies

DGL Group reported a stable operating performance in H1 FY26 despite a challenging market environment. Revenue declined 5.8% to $225.2m, impacted by the sale of the used lead-acid battery recycling plant and ongoing scarcity of used batteries. However, the company's chemical manufacturing and logistics divisions performed well, with record demand in WA for agricultural chemicals and strong export demand. Increased warehouse demand due to competitor exits also contributed positively. Earnings were impacted by continued price normalisation for AdBlue, reduced mining sector demand, and delays related to the ERP system rollout. The company maintained its focus on controlling operating expenses, which decreased by 2.5%. Underlying EBITDA declined 5.0% to $24.7m. The company continued to invest in growth initiatives, including the development of a new liquid waste treatment plant in NSW and expansion of bulk on-site chemical storage capabilities. Consolidation of smaller sites, implementation of group-wide systems, and integration of operations also remained key priorities. The company reduced net debt by $16.4m to $78.2m and increased net tangible assets per share by 4% to $0.74.

The company noted uncertainty regarding fertiliser supply and its impact on agricultural chemical demand, as well as commodity price turbulence due to the war in the Middle East. No other high-importance, price-sensitive forward-looking financial metrics were provided.

The company highlighted the positive response from customers to its new and improved facilities, the benefits of updated technology, and the increasing demand for its services as competitors exit the market. It also noted the ongoing investment required to maintain compliance with increasingly stringent regulatory requirements.