BMD Group has reported a 15 percent decline in profit for the year ending June 2026, citing a sharp rise in fuel costs as a key factor impacting its civil infrastructure projects, including work linked to the 2032 Brisbane Olympic Games. The company’s net profit fell to $54.6 million from $64 million the previous year, despite an almost 16 percent increase in revenue to $2.4 billion.
Chief Executive Scott Power identified a 50 percent surge in diesel and bitumen prices as a primary driver behind the profit decline. This increase has coincided with a ramp-up in infrastructure activities across south-east Queensland, notably connected to transport, healthcare, and Olympic preparations. Power highlighted that the spike in fuel costs emerged unexpectedly amid ongoing geopolitical tensions involving the United States and Israel with Iran.
“Fuel is a major input cost for our earthmoving operations, as our machinery consumes large amounts of diesel,” Power explained. He further noted that the industry faces prolonged procurement cycles and budget adjustments as clients grapple with rising expenses, which slows project timelines and increases holding costs for contractors.
The company’s work at Victoria Park, the designated site for Brisbane’s new 63,000-seat Olympic stadium, involves land clearing and bulk earthworks. This enabling phase, scheduled for completion by mid-2027, will precede construction handled by Besix Watpac and John Holland. While Power did not specify the precise financial impact of fuel inflation on this project, he emphasized that widespread cost pressures are delaying infrastructure delivery.
In addition to fuel price pressures, BMD cited weather-related disruptions and higher employee costs as factors restraining profitability. The company’s executive also linked softness in the residential land market to recent tax changes and interest rate hikes introduced by the federal government in the May budget. These measures, Power said, have diminished buyer demand, adversely affecting sales of residential land and adding further uncertainty to the housing sector.
BMD’s involvement in residential construction primarily involves preparing land parcels through enabling infrastructure like roads and sewer systems. Recent financial disclosures flagged a noticeable slowdown in inquiries and sales activity, mirroring broader trends reported by major residential developers Stockland and Mirvac. The rising cost of construction combined with increased borrowing costs has made new home building less attractive, with expectations that further interest rate increases could exacerbate the slowdown.
Consultants have also described the Queensland construction market as being in a “soft spot” as cost pressures persist ahead of anticipated growth in public and private projects. Forecasts predict sustained industry-wide cost escalations of around 7 percent annually over the next two to three years, impacting residential and commercial building alike.
Overall, BMD’s recent performance underscores the challenges infrastructure and housing sectors face amid volatile fuel markets and tightening economic conditions, as the region prepares for the significant demands associated with the upcoming Olympic Games and wider development projects in Queensland.