The Cleanaway Waste Management Ltd (ASX: CWY) share price is in focus today after the company updated investors about its FY26 earnings outlook, revealing an expected $20 million hit to EBIT due to the ongoing conflict in the Middle East and elevated fuel costs.
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What did Cleanaway Waste Management report?
- Estimated FY26 EBIT now forecast between $460 million and $480 million (previously $480 million to $500 million)
- Approximately $20 million adverse EBIT impact from higher fuel, supplier and logistics costs, and lower Middle East activity
- Contractual cost pass-through mechanisms helping recover a substantial portion of higher fuel costs
- No reported fuel supply issues across operations despite market volatility
- Cleanaway's pricing structures allow staged cost recovery, with most contracts adjusting by 1 July 2026
What else do investors need to know?
Cleanaway has a long-term strategic partnership in place with a major fuel supplier, ensuring steady access to competitively priced fuel throughout this period of disruption. Cost pass-through mechanisms, such as customer contracts with fuel levies and indexed repricing, support the company in offsetting input cost volatility.
While higher fuel costs are being felt, Cleanaway says most of this impact is timing-related rather than long-term margin pressure. Recovery of elevated fuel costs should occur as contracts are repriced and fuel markets stabilise, though there may be further uncertainty in Middle East project activity.
What's next for Cleanaway Waste Management?
Looking ahead, Cleanaway will keep monitoring fuel markets and trading conditions, particularly any further impacts from the Middle East conflict. Management expects most contracts to reflect fuel price increases by the start of FY27, which should help recover the bulk of the current cost challenges.
The business intends to maintain its focus on operational efficiency, using levers like fleet optimisation and procurement actions to help navigate volatility. Strategic relationships and contractual protections are expected to support resilient long-term performance.
Cleanaway Waste Management share price snapshot
Over the past 12 months, the Cleanaway Waste Management share price has declined 10%, trailing the S&P/ASX 200 Index (ASX: XJO) which has risen 15% over the same period.
