ARB Corporation Limited

For the 6 months ended 31 December 2025, ARB reported total sales revenue of $358 million, down 1% year over year. Reported profit before tax was $57.1 million, down 18.8%, or down 16.3% on an adjusted basis excluding one-offs; profit after tax was $42.2 million, down 17.2%, and earnings per share declined 17.9%. Gross profit was pressured by a $3.7 million decline in sales and a $6.9 million increase in materials and consumables, with materials and consumables at 43.7% of sales versus 41.4% a year earlier. Operating cash flow was $63.9 million, capex was $11.7 million, and the company ended the half with $59.4 million in cash and no debt. Looking ahead, management said second-half sales margins are expected to be broadly in line with the second half of FY 2025, with some uplift from a February price increase of about 3% and largely hedged Thai baht exposure; they also said second-half financial performance should improve relative to the first half and trade closer to the prior corresponding period.

Lachlan McCann framed the quarter as a challenging one for vehicle demand and fitment capacity, but emphasized that ARB is still building long-term growth levers. He highlighted the new ARB eCommerce platform, store expansion, and the Ford and Toyota relationships as strategic priorities, while saying the company is prioritizing products with stronger attachment rates such as Super Duty and HiLux over slower-moving opportunities like BYD Shark. His tone was confident and upbeat about the brand, the U.S. business, and the company’s long runway, but he acknowledged domestic aftermarket weakness and model-supply uncertainty.

Damon Page focused on the mechanics behind the profit decline: lower sales, a weaker Australian dollar against the Thai baht, and lower factory overhead recoveries. He noted the Thai baht averaged THB 21.17 to the Australian dollar in the first half versus THB 23.71 a year earlier, and said the company has largely hedged its second-half exposure at rates slightly more favorable than the prior corresponding period. He also said employee expenses were flat at $90.5 million, depreciation increased $2.4 million or 16% due to elevated capex, and operating cash flow of $63.9 million supported a cash balance of $59.4 million with no debt. The interim fully franked dividend was declared at $0.34 per share, consistent with last year, with a 67.2% payout ratio.

Analysts pressed management on whether gross margin pressure would reverse, and Damon said yes if the Thai baht strengthens, though the move back above THB 23 would be needed for a full reversal of the first-half impact. He also said the February price increase was about 3% on average, not 4% to 5%, and that the benefit should begin flowing through in late April, May and June. Lachlan addressed questions on BYD Shark versus Super Duty/HiLux by saying engineering resources are finite and ARB has prioritized the platforms with higher attachment rates. On EMEA, he said softer trading was partly tied to funding cuts in aid-and-relief customers and also to a distributor health/succession issue, while he described Toyota as supply-constrained rather than demand-constrained.