Mining Recovery Helps Monadelphous Regain Mojo
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Perth-based engineering services firm Monadelphous Group has rediscovered its growth mojo, judging by the latest financial report, with help from the rebound in commodity prices and activity, especially in oil, gas, gold and iron ore.
The company yesterday told the ASX that net profit was up more than 30% for the December 31 half year and that shareholders would get the benefit of a six cents a share lift in interim payout to 30 cents a share.
Net profit rise 32% to $37.6 million for the six months to December 31, off the back of a 36% surge in revenue to $850 million from a slew of contracts secured over the past 18 months.
CEO Rob Velletri said the result reflected the company’s strengthening market position and its ability to capitalise on improving levels of demand.
"Market conditions in our core resources market have improved, with solid demand expected to continue for sustaining and brownfield capital works," he said yesterday.
"Major construction prospects are improving, particularly in iron ore, and demand for maintenance services is expected to remain strong."
The company said it had secured contracts worth $385 million since the start of the financial year, including a two-year supply maintenance contract to for Rio Tinto in the Pilbara, a 12-month extension contract at Woodside’s Karratha gas plant and a number of new deals in North America, New Zealand, Mongolia and PNG.
Revenue in its engineering construction division jumped 63% in the half year, driven mostly by increased activity at the Ichthys LNG project in Darwin and growth in the water and renewables segments.
The maintenance and industrial services division saw an 18% rise in topline to a record $400.7 million, as demand for maintenance services increased across the resources and energy sectors. Monadelphous expects revenue growth to slow in the June half, but still produce an annual revenue rise of around 30%.
Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.
At the AFR he was a finance writer, Finance Editor, News Editor and Chief of Staff. At the Nine Network he was supervising producer of Business Sunday for more than 16 years. He has also written for other online and analogue print publications here and overseas.