Perenti Global managing director and chief executive officer Mark Norwell has revealed that demand for Australian workers is putting pressure on company costs due to increased wages.
Perenti has received more than $700 million in contracts since the start of the year.
However, Norwell said COVID-19 impacts and the Australian labour market has dampened the promising first quarter.
The Australia-based mining services company employs more than 7700 workers globally.
“Perenti has achieved a number of significant milestones in recent months and we continue to deliver on our 2025 strategy,” he said.
“While I am pleased with our achievements during the third quarter, it is unfortunate that these positive catalysts have coincided with the continuation of a challenging backdrop that includes the persistence of, and in some cases, worsening of COVID-19 impacts, the emergence of upwards wage pressure in the Australian labour market and further strengthening of the Australian dollar.”
According to Norwell, the impacts have softened Perenti’s outlook for the 2021 and 2022 financial years.
With COVID-19 continuing to bar international travel, Perenti stated that demand has increased for local labour which has resulted in higher wage growth that has impacted the company’s margins.
“We continue to develop and deploy specific initiatives with the aim of maintaining a high-quality team, Perenti stated.
“Notwithstanding these labour market challenges, we are confident that Perenti and our employee value proposition positions us well to source and maintain appropriate personnel levels to deliver on our current and potential future contract requirements.”
COVID-19 has also directly impacted the productivity of the company’s international operations.
Perenti has anticipated that the challenges will persist into the 2022 financial year.
The company is expecting revenue and operating earnings in the second half of the 2021 financial year to be softer than the first half.
Perenti delivered $1.01 billion in revenue for the first half of the 2021 financial year.