Monadelphous rides resources industry recovery

Image: INPEX

The rebound in market conditions in the resources industry is driving an improvement in engineering company Monadelphous’ performance.

Monadelphous today reported a 38.6 per cent increase in revenues ($874.1 million) during the December 2017 half year against the same period a year earlier.

The Perth-based company’s net profit after tax ($37.6 million) was also 31.6 per cent higher against the December 2016 half year result.

Monadelphous attributed the performance to solid revenue increases in the company’s core resources and energy markets in Australia.

The key factors that impacted the result included the high volume of contracts Monadelphous secured over the past 18 months, an increase in demand for maintenance services, and growth from diversification into overseas and infrastructure markets.

Monadelphous also reported that increased construction activity levels, particularly in oil and gas, water and renewable energy, as well as record sales from its maintenance services business, contributed to the result.

Rob Velletri, Monadelphous managing director, said the result reflected the company’s strengthening position in the market and its ability to capitalise on improving levels of demand.

“Much of our new work and growth in the period has been driven by our historical strong operating performance with longstanding customers,” Velletri said.

During the half year, Monadelphous’ engineering construction division continued work at the Ichthys LNG project in Darwin. It also started work at the Oyu Tolgoi underground project in Mongolia.

The company also progressed a growth strategy aimed at offering a range of maintenance services to new and existing customers. Its maintenance contracts include a two-year agreement with Rio Tinto in the Pilbara.

“Market conditions in our core resources market have improved, with solid demand expected to continue for sustaining and brownfield capital works,” Velletri said.

“Major construction prospects are improving, particularly in iron ore, and demand for maintenance services is expected to remain strong.”

Monadelphous has forecast its full-year revenues will be 30 per cent higher than what it recorded in fiscal 2017.

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