Monadelphous profit up 10 per cent

Engineering contractor Monadelphous has posted a 10 per cent rise in its first half profit to $87.1 million.

Despite a tightening resource market with slowing construction opportunities, the company said it is in a strong position to win new contracts.

The company’s net profit after tax in the six months to December 31 came in at $87.1 million, up 10 per cent from $79.1 million in the first half of fiscal 2013.

Revenue for the six months dropped just 1.02 per cent to $1.28 billion.

The company maintained its forecast for a 10 per cent decline in sales revenue for the full 2014 year but said its cost cutting strategy would help to offset this.

"In response to the change in market conditions, the company has achieved annualised cost savings of $34 million to date through a program focussed on consolidating and right-sizing the business," managing director Rob Velletri said.

The company made a 25.6 per cent decrease in its workforce since 2012.

The company said it had been awarded $600 million in new contracts and extensions in the first half and a further $100 million subsequent to the reporting period, with more contracts expected in the coming months.

Velletri said while the mining sector had softened, there were wins to be had in the oil and gas markets, as well as in LNG.

“Bidding activity in the oil and gas market remains high and the company is in a strong position to secure new contracts in both upstream and downstream LNG developments,” he said.

“Whilst demand for maintenance services volumes is under significant pressure from mining and minerals customers, volumes in the oil and gas market are expected to grow as new LNG projects move to the operating phase.”

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