Steady ship at Monadelphous

ENGINEERING and maintenance firm Monadelphous, one of the biggest beneficiaries of the LNG boom, has been able to maintain stability by posting a largely unchanged net profit for the past six months.
Steady ship at Monadelphous Steady ship at Monadelphous Steady ship at Monadelphous Steady ship at Monadelphous Steady ship at Monadelphous

Haydn Black

Reporter

Net profit after tax was $28.6 million, similar to same six month period in 2015.
 
Sales were $630.7 million, off 14% but still within guidance.
 
With new contracts worth $700 million secured during the quarter, the company is holding the line and making the best of growth in infrastructure.
 
Recent contracts included the supply and fabrication of wellhead skids for Santos as part of its upstream CSG development in northern Queensland, an order from APLNG for the supply of additional wellhead skids and electrical and instrumentation works for the product loading jetty with JKC Australia LNG at the Ichthys project in Darwin.
 
The maintenance and industrial services recorded sales revenue of $339.6 million, which was 19% higher than the second half of the 2016 financial year, with work primarily in the resources and onshore oil and gas sectors.
 
The division achieved high levels of contract retention in a very competitive environment. 
 
Managing director Rob Velletri said the award of additional water infrastructure and irrigation contracts, together with the award of its first major renewable energy project, highlighted the success of its expansion into the infrastructure services sector.
 
It established Zenviron, a joint venture with Zem Energy, to provide EPC services to the renewable energy market in Australia and New Zealand, and Mondium, a partnership with engineering and project management consultancy Lycopodium, to offer turnkey EPC solutions to mining and minerals customers in Australia and overseas.
 
Monadelphous ended the period with a record net cash position of $226.2 million.
 
Velletri said Monadelphous was in a solid position for long term growth, with a strong balance sheet providing it with substantial capacity to invest in new businesses, and a clear pipeline of opportunities in existing and new markets.
 
"We have demonstrated our agility in responding to the downturn in the resources sector by successfully capitalising on our strong position in the maintenance services sector and entering a number of new domestic and international markets" Velletri said.
 
 "We will continue to work with our customers to maximise productivity within their operations to ensure we continue to deliver cost competitive solutions."
 
He said the resource and energy markets in Australia remain challenging, despite a recent improvement in commodity prices, with capital expenditure levels at historically low levels, as the rate of major investment in new production slows. 
 
The outlook for the maintenance sector remains positive as production levels grow and operating assets increase in age.

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