Highlights

  • AoFrio reported a 28.1% decline in quarterly Revenue due to weaker motors sales impacted by US tariffs.
  • The company is accelerating growth in its higher-Margin IoT and SaaS Business segments.
  • Management expects stronger revenue and EBITDA performance across the remainder of 2026.

Overview

AoFrio Limited (NZX:AOF) reported a softer start to 2026 as first-quarter revenue declined following weakness in its US motors business. The company said tariffs affecting its largest motor customer contributed to the sharp decline in motor-related sales during the quarter. Despite this, AoFrio remains optimistic about its 2026 outlook as it focuses on expanding its higher-margin IoT and SaaS operations. Progress during the quarter included continued development of the SCS800 cellular controller and iQ platform, alongside a new supermarket-related IoT contract in Latin America. Management expects business conditions and Earnings performance to improve over the coming quarters.

Why Did AoFrio’s Revenue Decline in 1Q26?

AoFrio’s first-quarter revenue fell primarily because of a significant decline in its motors division, which was negatively affected by US tariffs. The company had previously anticipated disruptions linked to its largest motor customer and had already begun shifting focus toward higher-margin IoT products and software solutions. Motor revenue dropped sharply compared to the same period last year, weighing on overall financial performance. However, IoT revenue remained relatively stable despite difficult market conditions. Management described the weaker quarter as a temporary setback rather than a structural issue and said plans were already underway to offset lost lower-margin business with stronger technology-focused growth initiatives.

How Is AoFrio Positioning for Future Growth?

AoFrio is focusing heavily on expanding its IoT and SaaS ecosystem to drive future growth and improve profitability. The company expects the commercial release of its SCS800 cellular controller and iQ SaaS platform in the second quarter of 2026 to support revenue growth in North America and Europe. AoFrio also secured a new order for its iQ Food Retail solution following a successful trial with a major Latin American supermarket group. Management believes these higher-margin technology products will strengthen Recurring Revenue opportunities while reducing reliance on traditional motors business segments affected by global trade pressures.