Monadelphous resources construction projects hit by COVID-19

Rio Tinto

Rio Tinto's Tom Price expansion in Western Australia. Image: Monadelphous

Monadelphous has experienced delays on large resources construction projects that are under way due to supply chain issues.

The COVID-19 pandemic also impacted the engineering construction division, with potential new contract awards for construction projects experiencing a deferral.

Monadelphous also saw a material reduction to activity levels in the maintenance division, particularly in fly-in, fly-out (FIFO) operations with companies reducing non-essential work, delaying maintenance expenditure and deferring shutdowns.

The company has stated it will not provide revenue guidance for the 2020 financial year.

However, it expects revenue to be similar to that of the prior corresponding period should the current activity levels continue.

“We will continue to work closely with our customers during these challenging and uncertain times,” Monadelphous managing director Rob Velletri said.

“Our disciplined and prudent management, loyal workforce and strong balance sheet mean that we are well positioned to deal with the challenges ahead, and the opportunities that will arise in time.”

Monadelphous directors have agreed to a 30 per cent reduction in salary for the next six months as part of the company’s cost reduction measures.

The salaries of Monadelphous’ executive and general management teams will also be reduced by 10 to 20 per cent over the same period.

Monadelphous has also discontinued its New Zealand water infrastructure operations following an escalation in contract disputes and disappointing profitability levels.

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