Company Overview

NRW Holdings is an Australian mining and infrastructure contractor providing civil construction, contract mining, drilling and engineering services to resource and energy projects across Australia. Click here to see all our latest articles about NRW Holdings (ASX: NWH).

Core Products, Customers & Competitive Position

The company provides contract mining, civil construction, drilling and engineering services to major resource companies such as BHP, Rio Tinto and Fortescue, competing as a mid-tier mining services contractor with strong exposure to Western Australia’s iron ore and lithium investment cycle.

Company Life Cycle

The company relies on heavy mining as a mature mining services contractor whose earnings largely follow the capital-expenditure cycle of Australia’s resource sector.

Markets & Customers

The firm primarily serves large Australian resource producers including iron ore, gold, lithium and coal operators, with Western Australia and Queensland forming the core geographic markets.

Financials

Cost Structure

Costs are dominated by labour, fuel, equipment maintenance and depreciation of heavy mining fleets, with margins largely determined by contract pricing, fleet utilisation and operational efficiency on large resource projects.

Income Statement Trends

Revenue grew from A$2.22 billion in FY2021 to A$3.27 billion in FY2025, implying an average annual growth rate of about 10% per year.

In FY2025 the company reported operating profit of A$58 million (down from A$161 million in FY2024) and diluted EPS of about A$0.06 per share.

Net Profit Volatility

Net income rose gradually until FY2024 but collapsed to about A$28 million in FY2025, highlighting sensitivity to project costs and contract execution.

Selling, General & Administrative expenses increased materially over the period, reaching about A$1.25 billion in FY2025, becoming the main drag on profitability.

Sustainability of Revenue Growth

The company’s roughly 10% revenue growth in recent years appears largely driven by mining investment cycles and new contract wins rather than purely organic expansion, meaning it may not be consistently sustainable over the long term.

Balance Sheet Overview

Total assets grew steadily from A$1.31B in 2021 to A$1.70B in 2025, mainly driven by rising mining equipment (PPE), while cash also increased to about A$266M, indicating stable liquidity.

Leverage and Capital Intensity

Total debt rose to roughly A$411M due to equipment financing and leases, but overall leverage remains typical for a capital-intensive mining services contractor.

Cash Flow Strength

Operating cash flow remained strong and relatively stable, reaching about A$251M in FY2025, supported by high depreciation typical of a capital-intensive mining services fleet.

Cash Flow and Capital Intensity

Over the past five years the company averaged roughly A$160M in annual capital expenditures and about A$150M in depreciation, meaning maintenance investment broadly matches asset wear, suggesting most capex is directed toward sustaining and gradually expanding the mining equipment fleet rather than aggressive growth spending.

Important Recent Announcements

Major Mining Contracts in Western Australia

The company has recently secured several large mining services contracts across iron ore and lithium projects in Western Australia, reinforcing its revenue visibility and supporting a multi-year pipeline of contract mining work.

Expansion in Battery Metals Projects

New work in lithium and battery-materials projects has become an important growth driver, diversifying the company’s exposure beyond traditional iron ore and coal contracts.

Latest Half-Year Financial Performance

Revenue Momentum

In the latest half-year (Dec 2025), revenue increased to A$1.97B, up from A$1.62B in the previous half, continuing the strong top-line growth trend seen through 2024–2025 and reflecting solid demand for mining services.

Profitability Recovery

Operating income rebounded to about A$114M from a –A$26M loss in the June 2025 half, while diluted EPS recovered to around A$0.16, indicating a recovery in margins after earlier cost pressure, likely supported by stronger mining investment and expanding capital expenditure across the resources sector.

Macro Drivers Behind Growth

Part of the recent revenue momentum likely reflects stronger mining investment, supported by higher base-metal prices and improved project economics as global interest rates eased, encouraging renewed capital spending across the resources sector.

Fundamental view

Dividend & Valuation Snapshot

The stock trades on a high P/E of about 56x, suggesting the market is pricing in an earnings recovery, while the price-to-free-cash-flow multiple near 11x and a free cash flow yield around 9% indicate underlying cash generation remains relatively strong despite weaker reported profits.

Dividend Profile

The dividend yield is currently around 3% with 100% franking, and the company has historically delivered dividend yields above 5%, indicating a track record of meaningful shareholder distributions when earnings are stronger.

Financial Forecasts

Revenue is expected to exceed A$4B, potentially reaching around A$4.5B in a bullish scenario, while EPS is projected near A$0.40, assuming continued strength in mining project activity and contract volumes.

Valuation

Assuming EPS of about A$0.40 and applying a mid-cycle sector multiple of roughly 14–16x, the implied intrinsic value comes to around A$5.6–A$6.4 per share, consistent with a typical valuation range for cyclical mining services contractors.

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Technical View

Primary Trend (Long-Term Trend)

Price has been in a clear multi-year uptrend since 2022, while price remains well above the long-term moving average. The long-term trend therefore remains structurally bullish.

Breakout Zone

Price recently broke above the A$5.6–A$5.8 resistance zone, which had acted as a ceiling in prior rallies. This breakout suggests the market is pricing in improved earnings expectations.

Potential Technical Levels

After the breakout, the former resistance near A$5.6 could now act as support, while the next psychological resistance appears around A$6.5–A$7.0.

NRW Holdings (ASX: NWH) share price forecast — *Source: TradingView*

Key Risks, Potentials & Catalysts

The main risks include a slowdown in mining capital expenditure, cost inflation and project execution delays, while the key potential upside comes from continued strength in iron ore and battery-metal investment cycles.
Major catalysts would include large new contract awards, rising mining project activity and sustained commodity price strength supporting higher capex across the resources sector.

FAQs About NRW Holdings (ASX: NWH)

1- Is the stock still attractive after the recent rally?

The recent rally reflects improving earnings expectations, so the stock looks less obviously cheap than before, but it may still offer value if mining investment and contract wins remain strong.

2- Is the dividend sustainable?

The dividend appears reasonably supported by cash flow, although payout sustainability will depend on whether profits recover more consistently from the recent earnings dip.

3- What is the biggest risk to the investment case?

The main risk is a slowdown in mining capex, which could reduce contract volumes, pressure margins and weaken earnings momentum.