Altrad lifts revenue to $700m

Industrial services contractor Altrad has disclosed strong growth in its Australian revenue after bedding down the acquisition of Perth companies AGC and Valmec.

Altrad Services chief operating officer for Australia Luke Gallagher said the group anticipated revenue would reach $700 million in the financial year to August 2024.

That is up from $620 million in the year to August 2023, when the group’s performance was battered by legacy issues at AGC.

Altrad agreed to buy AGC in December 2022 after its parent, Ausgroup, fell into receivership.

“While AGC clients have been extremely supportive and stood by the business through the difficult pre-acquisition period, AGC’s revenue has reduced through the completion of loss-making legacy projects,” Mr Gallagher said.

His comments provide a rare insight into Altrad, which, as a privately owned company headquartered in France, has previously provided scant detail on the performance of its Australian operations.

Altrad is one of the largest contractors in Australia, particularly in the field of maintenance and industrial services.

It has about 3,000 people working across 60 sites, with three quarters of those in WA.

That compares to major competitors such as ASX company Monadelphous, which has more than 5,300 employees, and private German company Kaefer, which has about 2,000 people in Australia.

Altrad’s scale was substantially bolstered by the addition of AGC, which had annual revenue of $245 million and 1,300 staff in FY22 when it last reported as an independent company.

That followed the 2021 purchase of ASX company Valmec, which had revenue of $137 million and 250 staff prior to its sale.

Having worked in the Middle East for the past seven years, including as international chief executive for energy services company Altrad Babcock, Mr Gallagher opted for a lifestyle change with his young family.

Since moving to Perth last October, he has been tasked with integrating Altrad’s major operations across Australia.

He has also been focused on pursuing growth in both its traditional industrial services and maintenance business, and in new areas such as hydrogen.

The group has a global strategy of providing integrated services to its customers.

Mr Gallagher said customers were wanting to reduce the interface risk and cost from having multiple contractors.

“We have got to be able to provide the full suite of services,” he said.

Altrad’s customers in Australia include major resources companies Chevron, Woodside, BHP and Rio Tinto, energy companies APA Group and Origin Energy, and utilities such as Water Corporation.

“Through the two acquisitions, we have a wider diversity of customers,” Mr Gallagher said.

The acquisitions also took Altrad closer to its goal of fully integrated services.

AGC added mechanical and electrical services and a fabrication workshop at Kwinana, while Valmec added engineering and project management to Altrad’s traditional services, which include maintenance, scaffolding and access services.

The AGC deal also brought unexpected reputational damage, as AGC had acquired a labour hire company (Workforce Logistics) that was found by the Fair Work Commission to have created “sham” workplace agreements.

Mr Gallagher said the acquisition followed a limited period of due diligence.

“The company was in receivership at the time, so Altrad’s immediate focus was ensuring the welfare and job security of 1,300 people employed by AGC who were at risk of losing their jobs during the festive season,” he said.

“Upon learning of the issues post-acquisition, Altrad immediately rectified the situation by transitioning impacted employees to a fairer and more appropriate EBA.

“Altrad consented to the appeal, was wholly cooperative throughout the proceedings and fully accepted the commission’s findings.”

Mr Gallagher said the group was targeting hydrogen and energy storage projects for growth.

“That’s been a real growth area for us,” he said.

“There is a lot of early engagement on hydrogen, it’s an exciting opportunity.”

Altrad’s biggest win in that sector was a contract awarded last year to build the $65 million Murray Valley hydrogen facility in Victoria for Australian Gas Infrastructure Group.

The facility will feature a 10-megawatt electrolyser and have annual production of 500 tonnes of hydrogen.

It follows a previous win by Valmec, which built a 1MW hydrogen facility in South Australia for the same client.

Mr Gallagher said Altrad was also refurbishing the Kwinana workshop and investing in new machinery.

“They had a few tough years before (AGC) went into receivership,” he said.

“But its reputation for quality is really good, so we’re excited to get that as part of the portfolio.”

Valmec’s Kewdale operations have moved to Kwinana and the next step would be relocating Valmec’s Henderson team (via its subsidiary APTS).

“The idea is to make Kwinana an operational centre of excellence, hence why we are making the investment into Kwinana,” Mr Gallagher said.

He said Altrad was targeting mid-sized fabrication projects with more intricate configurations at Kwinana.

Recent examples include the fabrication of sub-sea ‘mud mats’ for Aker Kvaener and conveyor systems for mining clients.

“The workshop needs to be flexible, not set up for one thing,” Mr Gallagher said.

He added that Altrad had recently taken on six apprentices and was intending to take on more.

“We are planning to rejuvenate that program,” Mr Gallagher told Business News.

He emphasised that Altrad wanted to ensure it had suitably skilled and experienced people on its team and was able to provide appropriate support before it took on more apprentices.

Mr Gallagher said two of Altrad’s specialist subsidiaries – Altrad Sparrows and Altrad RMD Kwikform – would continue to operate under their established brands and had not been integrated.