Qube is warning that fallout from the conflict in the Middle East will shave as much as $20 million from its FY26 EBITA, putting pressure on margins. The logistics group points to a mix of surging fuel costs, weaker agricultural volumes and softer forestry exports feeding into the downgrade. Management frames the impact as material but temporary, with much of the pain tied to war-related disruptions and shipping constraints.
The company flags that group EBITA in FY26 will be reduced by between $10 million and $20 million as fuel expenses jump faster than it can pass them through to customers. A further underlying EBITA hit of $3 million to $5 million is expected in the third quarter of FY26 because of severe weather disrupting operations. Qube explains that the Middle East conflict is driving up fuel prices and contractual timing lags mean recovery from customers trails the spike. It expects an offsetting benefit in FY27 if fuel prices ease and those lag effects unwind.
Lower agricultural throughput is compounding the squeeze, with Qube citing both sharply higher shipping costs and difficulties getting vessels into key Middle Eastern markets. Forestry export volumes are also down as rising freight and logistics costs make some routes less economic, particularly for bulk commodities. Cyclones have hampered port and bulk activities in Western Australia, while major storms and flooding in New Zealand have curtailed forestry movements. Those events have reduced utilisation across several sites, driving inefficiencies and amplifying the earnings drag in Q3 FY26.
Qube still guides to underlying earnings growth for FY26 but concedes the final outcome hinges on factors largely outside its control. The actual result will depend on how much of the additional fuel bill cannot be recovered from customers this year and whether activity weakens further among major clients or in exposed export markets. Management says most of the negative drivers look short-lived, or at least non-recurring, and argues they should mostly reverse in FY27 if the conflict recedes and trade routes normalise. That sets up FY27 as a potential rebound year, but only if geopolitical tensions ease and weather disruptions do not repeat at the same scale.
