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Monadelphous sees growth in maintenance market

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World Coal,

Australian engineering company, Monadelphous Group, has announced a fall in revenues of almost 30% in the six months to December 2015 on the back of a slowdown in investment in major projects. The company offers engineering services to industries including coal, metals mining and processing, LNG, coal seam gas and water.

Sales revenues for the six months to December 2015 were AUS$737 million, while the company’s net profit was down 37.9% at AUS37.6 million.

Despite the slowdown, however, the company’s maintenance and industrial services division picked up almost AUS$1 billion in new or extended contracts. “Maintenance prospects remain positive,” said Monadelphous Managing Director, Rob Velletri.

Among the new contracts, the company has picked up a contract with BMA Coal Operations to provide maintenance works for a major dragline shutdown at Blackwater coal mine in Queensland, as well as a two-year contract to provide dragline maintenance at various BMA mines in the Bowen Basin.

“The outlook for maintenance and industrial services is more positive as maintenance activity begins to normalize and new process facilities continue to transition from the construction to the operating phase,” the company said in its outlook.

The engineering construction division reported sales revenue from 43% in 2H15 with business conditions more challenging here than for maintenance services. “Opportunities for new major construction contracts in core customer markets are likely to remain at low levels,” the company said. “Delays to new projects seeking final investment decisions persist and there remains a backlog of projects at the feasibility stage.”

Underlining this outlook, the company secured and undertook only AUS$100 million in new contracts in 2H15. This included a three-year contract with APLNG for the fabrication and supply of wellhead separator skids in the Surat Basin, Queensland.

The company also announced a new agreement in the US with a US-based contractor for the establishment of a jointly-owned company, Monaro.

“Monadelphous’ US entry is a key component of the group’s long-term growth strategy and is a major step in developing a position in the US energy market,” the company said.

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