Monadelphous says outlook ‘strong’ defying China wobbles

afr.com:

Perth-based engineering group Monadelphous expects to secure more resources and energy contracts after its annual net profit rose 2.5 per cent to $53.5 million, boosted by higher income from a renewable energy joint venture.

“Longer-term demand trends are forecast to remain strong across most commodity markets, despite some short- to medium-term uncertainty relating to Chinese domestic consumption and a possible US recession,” the engineering group said on Tuesday.

Maintenance and industrial services revenue increased 11 per cent to a record $1.3 billion as the company secured contracts on iron ore, alumina and coal seam gas projects. Glenn Hunt

“The resources and energy sectors are expected to provide a significant pipeline of prospects across a broad range of commodities, with expenditure related to energy transition representing an increasingly larger proportion of investment activity over coming years.”

Profit from a 55 per cent stake in Zenviron, a joint venture with ZEM Energy Investments, jumped to $7.7 million from $652,000 a year earlier after the group completed a wind farm and won several new wind and battery storage projects.

Monadelphous’ engineering construction revenue slid 30 per cent to $542 million but maintenance and industrial services revenue increased 11 per cent to a record $1.3 billion as the company secured contracts on iron ore, alumina and coal seam gas projects.

Group profit margins rose to 6 per cent from 5.8 per cent a year earlier.

However, Monadelphous warned that it remains difficult to get labour and costs continue to escalate. Monadelphous’ total workforce including subcontractors dropped to 5674 people from 7977 people a year earlier, mostly due to a Chilean subsidiary, Buildtek,