LOGISTICS group Qube expects to handle lower grain volumes and face higher fuel costs for the remainder of the financial year, which ends June 30.

In an update posted to the ASX, the company said the Middle East conflict and recent several weather events in Western Australia and New Zealand would have some effect on its FY26 earnings.

Qube said earnings before interest, taxes and amortisation were expected to be impacted by between $10 million and $20M.

The company said earnings would take a further $3-$5M hit from Cyclone Narelle’s impact on WA Ports & Bulk operations, as well as flooding in New Zealand that affected forestry activities.

It said these factors would be “largely temporary or timing related” and include:

• An expected rise in fuel costs due to delays in passing those expenses on to customers, with a corresponding benefit likely in FY27 if fuel prices ease;
• Lower agri-volumes, primarily grain, driven by higher shipping costs and vessels being unable to access key Middle Eastern markets; and,
•  Reduced forestry exports due to higher shipping costs.

“Qube has robust supply agreements with two of Australia’s major fuel suppliers and has continued to receive fuel supplies in line with normal trading volumes, with no interruption currently expected to Qube’s operations,” the update said.

“Qube also has strong contractual protections in place across most of its operations, as well as effective commercial levers that are expected to enable the business to largely mitigate these challenges.

“However, there is likely to be a timing lag between the incurrence of higher costs by Qube and the subsequent recovery of those costs under customer contracts.”

The company said in times of “prior market disruptions”, markets it operates in have proven highly resilient.

“Consistent with this pattern, over the medium to long term, major events such as those occurring now have tended to be beneficial for Qube as customers are inclined to hold more inventory (rather than rely on just-in time supply chains) and customers place greater value on logistics providers with a demonstrated record of reliability and strong financial and operational capability.

“Qube also expects that recent events are supportive of an acceleration in investment in new alternative energy projects.

“This is a market in which Qube has strong relationships with the major industry participants and can offer an unrivalled range of logistics solutions to support these activities.”

The company said it still expected to deliver underlying earnings growth in FY26.

“The extent of growth will depend on a range of factors, particularly the quantum of additional fuel costs incurred that can’t be recovered by Qube in FY26, as well as any deterioration in activity levels across Qube’s key customers and markets as a result of the Middle East conflict.

“Qube continues to have multiple organic and inorganic growth options across its core markets and continues to be well placed to deliver sustainable underlying earnings growth.”

MAM sale progress

The update does not impact the Macquarie-led acquisition of Qube which is currently progressing through the approvals stage.

“The parties are continuing to work together to secure all the necessary third-party approvals required for the scheme to be implemented and are working towards the timetable outlined in Qube’s announcement of 16th February 2026.”

In February, Qube managing director Paul Digney said approvals were expected to take four to six months.

Therefore, at the earliest, the approvals could be completed before the end of the financial year and well before the company’s scheduled FY26 results announcement on August 20.

Source: Qube, ASX