Major contracts push Decmil to strong start in 2019

The South Flank site. Image: BHP

Decmil has secured several Tier 1 mining contracts to set up the engineering contractor for a profitable 2019.

The Western Australia-based company won a $65 million contract extension with BHP at the South Flank project in the Pilbara during the December quarter.

Decmil is upgrading the site’s Mulla Mulla accomodation village, including the installation of 632 new rooms, as well as refurbishing and relocating existing rooms.

The expansion of the project built on a $13 million early works package and $75 million stage one package to a new total of $153 million.

It also inked a three-year, $150 million framework agreement on the Shell-operated Queensland Gas Company (QGC)’s brownfields coal seam gas facility in Queensland’s Surat Basin.

The company also wrapped up its contracts with Rio Tinto at the Amrun bauxite mine in Queensland and Fortescue at Port Hedland in the previous quarter.

Decmil participated in extensive construction work at the Amrun site (part of Rio Tinto’s Weipa operations), including the building of workshops, storage facilities, wastewater systems, process water distribution, comms and electrics, and several other developments.

The Port Hedland project, meanwhile, involved the creation of tug facilities for Fortescue’s Pilbara Marine subsidiary.

These works helped Decmil towards a 96 per cent jump in revenue for the six months ended December 31 last year on the back of several high-profile contracts.

The company also secured several prominent contracts outside of mining, most prominently a $277 million engineering, procurement and construction (EPC) contract at Sunraysia’s solar project in New South Wales, a $86 million roads contract in Victoria and a $NZ185 million ($177.5 million) prisons contract in New Zealand.

The company achieved $276 million in revenue for its 2019 first half result, with contract revenue for the full year currently standing at $650 million.

“Decmil’s diverse capability, national footprint and Tier 1 client base is providing good forward revenue visibility and increasingly better quality of earnings,” said Decmil managing director and chief executive officer Scott Criddle.

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