Monadelphous still motoring

ANOTHER year, another growth in earnings. Or same story, different year. Either way, Monadelphous has delivered its eleventh consecutive year of earnings growth, recording a $A137 million net after-tax profit for 2011-12.
Monadelphous still motoring Monadelphous still motoring Monadelphous still motoring Monadelphous still motoring Monadelphous still motoring

Monadelphous managing director Rob Velletri.

Staff Reporter

The company has announced a fully franked 75c per share final dividend, up 36.4% on the 55cps final dividend in 2011. That takes the full year’s dividend to $1.25 a share fully franked.

The NPAT result is up 44.5% on the previous year and flows from a sales revenue record of $1.9 billion.

Of course the resources sector played a huge part in the Monadelphous result, with sales growth spread across a host of project from the coal, iron ore and LNG sectors.

The NPAT figure did include a one-off gain of $11.4 million from the sale of Norfolk Group shares.

That aside, the underlying NPAT of $126 million also was a record, up 32.5%.

Earnings before interest, tax, depreciation and amortisation, along with the gain from the Norfolk Group shares, was $196.5 million, up 28.2% from the 2010-11 year.

The company finished the year with $152.9 million in the bank and an operating cash flow of $138.6 million, which is up 10% on the previous year.

Capital spending on property, plant and equipment for the year was $74.2 million. Another $19.6 million was committed at June 30 to support high levels of secured work and the strong pipeline of opportunities.

This capex included investment in the company’s mobile crane fleet with additions including a 600 tonne crane and numerous other large capacity cranes and self-propelled modular trailers.

Contracts and contract extensions of $2 billion were won during the year.

Major project involvement for the engineering construction division included structural, mechanical, electrical and piping work at BHP Billiton’s Worsley Alumina efficiency and growth project, SMP work for Newcrest Mining’s Cadia East project at Orange in New South Wales and engineering construction services at Woodside’s Pluto LNG project in Karratha.

The company also entered into its first marine contract though the Monadelphous Muhibbah Marine joint venture.

That JV will construct the approach jetty and ship berth for the Wiggins Island coal export terminal project in Gladstone, Queensland. This contract is worth about $33 million.

MMM has since secured another contract to build and commission a shiploader for WICET.

The engineering construction division entered into two five-year framework agreements for its major program of iron ore construction works in the Pilbara.

The first agreement is to provide SMP packages and the second is for electrical and instrumentation packages.

These agreements give Monadelphous preferred contractor status.

There are a couple of clouds on the horizon in the form of industry wide supply and infrastructure constraints and labour availability, or the lack thereof.

Monadelphous is certainly not alone in these areas though.

Managing director Rob Velletri said the company had maintained a strong leadership position in its core markets and further developed its presence in infrastructure sectors.

“What Monadelphous is seeing is a strong pipeline of engineering construction opportunities, reflecting the numerous large scale LNG, iron ore and coal projects in the early phases of execution,” he said.

“While there has been some recent market commentary about potential delays and uncertainty of commitments to future new projects, the current crop of approved projects, particularly in the LNG sector, will drive strong demand for the next few years.”

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