Dalrymple Bay Infrastructure (ASX:DBI) reported higher earnings and lifted distribution guidance following the completion of a capital allocation review, as management highlighted improved operating performance, a major debt refinancing, and continued progress on its non-expansionary capital program (NECAP).
FY25 financial performance and distributions
Chief Executive Officer Michael Riches said DBI “continued to improve” financial performance and distributions in the 12 months ended 31 December 2025 (FY25). EBITDA rose 5.2% year-on-year to AUD 294.3 million. Funds from operations (FFO) increased 10.6% to AUD 173.3 million, excluding one-off early repayment costs and an associated tax benefit related to DBI’s December 2025 refinancing.
Capital allocation review drives higher distribution guidance
Management said the capital allocation review—first flagged at the FY25 half-year result—has now been completed and led to three key decisions that underpin a “step change” in distribution guidance.
- Incremental revenue and cost savings to flow through to distributions: DBI said sustainable initiatives will be applied in full (post-tax) to distributions. Riches gave an example: a AUD 5 million increase in FFO would equate to roughly a 1 cent per security increase in distributions.
- Greater use of debt to fund NECAP: DBI intends to increase the proportion of debt funding used for NECAP spend, shifting from the heavier reliance on operating cash flow used over the past four years. Management said leverage remains “well below” covenant levels and rating agency criteria, providing capacity for this change.
- Payout ratio moved to the upper end of target band: With less reliance on FFO to fund NECAP projects, DBI intends to increase the distribution payout ratio to the upper end of its 60%–80% target range.
As a result, DBI guided distributions for the remainder of TIC Year 2025–2026 to AUD 0.26375 per security, representing a 7.7% increase versus guidance provided in May 2025. The company said it expects to reassess guidance in May once inflation and NECAP amounts—and the resulting TIC for TIC Year 2026–2027—are known.
DBI also announced a Q4 2025 distribution of AUD 0.0675 per security, a 10.2% increase on previous guidance for that quarter, to be paid on 19 March 2026. Management noted that tax deductions associated with early repayment costs from the 12 December 2025 refinancing meant no tax was payable by the group in respect of FY25, reducing franking credits that otherwise would have been expected for Q4 2025 and FY26 distributions. The Q4 2025 distribution will therefore be a combination of an unfranked dividend and repayment of loan notes.
Despite the step-up in guidance, management reiterated its target of 3% to 7% per annum distribution growth for the foreseeable future, subject to business developments and market conditions.
Refinancing lowers margins and reshapes interest outlook
Chief Financial Officer Stephanie Commons detailed DBI’s December 2025 refinancing, in which the company raised AUD 1.07 billion to repay 2020 US private placement (USPP) notes and repay and cancel AUD 410 million of revolving credit facilities. Commons said DBI executed the transaction after spread compression through 2025 resulted in a 1.56% weighted average margin on refinanced debt, compared with a 3.26% weighted average margin on the 2020 USPP notes.
Early repayment costs—including cross-currency swap rate costs and make-whole amounts—totaled AUD 103 million, with an associated AUD 27 million tax benefit. Commons said the costs were funded by drawing on new revolving bank facilities and using funds realized from converting in-the-money value in remaining cross-currency swaps.
DBI said the refinancing will deliver “substantial future interest cost savings,” with Commons citing direct net AUD 75 million of reduced interest costs through to 2030. On interest rate positioning, management said DBI’s weighted all-in interest rate will be approximately 4.63% until mid-2026, before stepping up to around 6.5% as a block of five-year swaps from May 2021 roll off and are replaced by forward-start swaps transacted in 2022 and 2024. Commons noted the 6.5% outlook is below the 8% previously guided at the HY25 result, reflecting the refinance.
DBI reported it had AUD 2.25 billion of total debt facilities, with AUD 2.07 billion drawn at 31 December 2025 and a weighted average tenor of 6.3 years. S&P and Fitch reaffirmed ratings during 2025 at BBB and BBB-, respectively, and DBI said Fitch recently moved its outlook to positive. Management also said foreign currency debt remains 100% hedged back to AUD, and that approximately 83% of drawn debt was fixed at 31 December 2025.
NECAP pipeline and growth outlook, plus strategic priorities
Riches emphasized NECAP as a source of organic growth, noting DBI earns a return on and of NECAP expenditure and that TIC is adjusted each 1 July to account for commissioned projects, including an interest during construction component. DBI said approximately AUD 429.6 million of capital projects were underway via its NECAP program.
Management indicated that, based on current expectations, around AUD 60 million to AUD 70 million (excluding interest during construction) could be added to the NECAP asset base at 1 July 2026, with the bulk of the remainder expected to be added at 1 July 2027, assuming major projects remain on schedule.
DBI said that if Shiploader 1A and Reclaimer 4 are completed as expected, together with other committed projects, TIC would increase by approximately AUD 0.70 per ton in TIC Year 2027–2028 from 1 July 2027. Riches said each AUD 0.70 per ton uplift would add roughly AUD 59 million to revenue. In Q&A, management attributed the increase from a previously discussed AUD 0.63 per ton to the inclusion of NECAP series Y (AUD 24.2 million) and an assumption of a higher 10-year government bond yield (management referenced an assumption around 4.5%).
On major projects, Riches said Shiploader 1A commenced in April 2023 and is expected to reach commissioning and machine removal by Q4 2026, and that both Shiploader 1A and Reclaimer 4 remain on schedule and on budget. DBI also discussed ongoing work on Shiploaders 2 and 3, noting a NECAP W series study is underway to assess replacement or refurbishment, with the study expected to be completed during 2026 and a potential pathway on timing by year-end. Management suggested a recommendation could be sought around “this time next year,” with potential customer approval in the first half of 2027 and commitment sometime during 2027.
Riches also reiterated DBI’s “significant expansion optionality” through its 8X project, expected to provide up to 14.9 million tons per annum of incremental capacity, while noting the access queue remains over 29 million tons per annum. Management said demand timing depends on mine expansions and new developments, and that DBI continues to explore optimizing existing capacity in parallel with 8X assessments.
Looking ahead, management outlined priorities for the next 12 months including further organic revenue initiatives (including ancillary revenue that management said is largely sustainable and involves no capital deployment), completion of Shiploader 1A and Reclaimer 4, continued assessment of refinancing opportunities, evaluation of diversification opportunities aligned with DBI’s risk profile, and delivery of terminal-wide ESG and sustainability initiatives.
About Dalrymple Bay Infrastructure (ASX:DBI)
Dalrymple Bay Infrastructure Limited owns the lease of and right to operate the Dalrymple Bay terminal, a coal export metallurgical coal facility in Bowen Basin in Queensland, Australia. The company provides terminal infrastructure and services for producers and consumers of Australian coal exports. Dalrymple Bay Infrastructure Limited was incorporated in 2020 and is based in Brisbane, Australia.
