HMC Capital Ltd (HMCLF) (Half Year 2026) Earnings Call Highlights: Strong AUM Growth and …

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Tue, February 24, 2026 at 2:02 PM GMT+9 4 min read

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This article first appeared on GuruFocus.

Release Date: February 23, 2026

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

HMC Capital Ltd (HMCLF) reported strong operational momentum with an increase in assets under management (AUM) to AUD 19.5 billion, up AUD 600 million since June.

The company has a net liquidity position of AUD 1.6 billion, reflecting a strong and flexible balance sheet.

A strategic partnership with KKR in the energy transition sector is expected to add significant fee-earning AUM in the second half of FY 2026.

HMC Capital Ltd (HMCLF) declared an interim dividend of AUD 0.06, partially franked, consistent with its commitment to sustainable shareholder returns.

The company is targeting a 20% return on equity in its energy transition projects, with committed equity in place for an AUD 800 million BESS project.

Negative Points

The company experienced a lower contribution from performance fees and principal investment income due to adverse market conditions.

Transaction and performance revenue decreased to AUD 4.2 million, reflecting the absence of larger transaction revenue compared to the previous year.

Corporate expenses increased modestly as the company continued to invest in platform capability.

The private equity segment reported an operating earnings loss before tax of AUD 3.1 million, primarily due to lower management fees.

The company's share price has been volatile and does not reflect the management's view of the business outlook.

Q & A Highlights

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Q: Can you rank the capital-light growth opportunities in terms of timing and confidence? A: The year has been one of consolidation and setting up platforms for growth. In real estate, partnerships and deployment are in place, with AUD 200 million of new investments and AUD 800 million of dry powder. The Sydney One digital asset is progressing well, with AUD 900 million+ development projects. Private credit has seen strong growth, with a 13% increase in AUM. In energy transition, the AUD 800 million BESS project is secured and funded, contributing to a total of AUD 4 billion in deployment opportunities. David Di Pilla, CEO

Q: Are the EBITDA targets for FY 2026 post-expenses, and is the expectation to deliver about AUD 170 million of group EBITDA? A: Yes, that is correct. Will McMicking, CFO

Q: Can you unpack the AUD 53 million expected from principal investments in terms of fair value gains, particularly in Energy Transition? A: We have had independent valuations of the portfolio, with a midpoint of AUD 1.3 billion, compared to the AUD 1.1 billion paid. The value gain will be booked, providing a guide to the potential gains. Will McMicking, CFO

Story Continues  

Q: What control does KKR have over the Energy Transition project, and what are their rights? A: It is a genuine long-term partnership with joint rights and joint control, equity accounted. David Di Pilla, CEO

Q: How is the HERF fundraising process progressing, and when do you expect to close it? A: Deployment across the real estate platform has been strong, with more deployment into HARP and HUG. We are securing the right assets to close the fundraising and expect to provide an update soon. David Di Pilla, CEO

Q: Can you discuss the timing of the CRA private credit mandates and potential LIP? A: We have a AUD 4 billion pipeline and expect to execute selectively. The core fund has doubled and may create an opportunity for a listed note. We are optimistic about securing mandates before June 30 this year. David Di Pilla, CEO

Q: How do you expect the AUD 180 million balance sheet position in energy transition to evolve, and how will the AUD 800 million BESS project be funded? A: The platform’s operational and development spend is fully funded. KKR will fund 90% of the BESS project, with a 60/40 debt-equity structure. We expect compelling returns from these opportunities. David Di Pilla, CEO

Q: What is the core driver of the reduction in gross operating cash flow, given the increase in management fees? A: The reduction is due to a timing buildup of working capital, with some support provided to management funds like HCW and UHF, where fees are accrued but deferred. Will McMicking, CFO

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

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