Cleanaway Waste Management (ASX:CWY) has revised its FY26 earnings guidance downward, citing operational headwinds triggered by the ongoing conflict in the Middle East.
The company revealed that the geopolitical instability has driven up direct fuel costs and third-party logistics expenses while simultaneously dampening activity within its Contract Resources business in the affected region.
The company now estimates the combined adverse impact on its EBIT to be approximately $20 million for the 2026 financial year.
Cleanaway has adjusted its FY26 EBIT expectations to a range of $460 million to $480 million, down from the previously forecasted $480 million to $500 million.
Despite the lowered outlook, management emphasised that the business model remains resilient.
The stability is underpinned by strategic long-term fuel supply partnerships and robust contractual cost pass-through mechanisms, such as fuel levies and periodic indexed repricing.
Cleanaway noted that the current financial impact largely reflects timing differences in cost recovery rather than a permanent erosion of structural margins.
Most contracted price adjustments are set to reflect recent fuel spikes by July 1, with the remaining adjustments following in FY27.