Amidst the proposed mining tax and the ripple effects of the global financial crisis, Western Australian companies servicing the mining and resource sector are cautiously optimistic in their outlook for the 2011 financial year.
Amidst the proposed mining tax and the ripple effects of the global financial crisis, Western Australian companies servicing the mining and resource sector are cautiously optimistic in their outlook for the 2011 financial year.
With the reporting season firmly in motion, companies such as Clough and Monadelphous are noting sizable order books and positive views into the future, putting this down to diversifying the capabilities of the organisations and serviceable markets.
Clough said it made significant progress in the implementation of the strategy as an engineering, procurement and construction contractor to the oil and gas industry.
Clough’s chief executive John Smith said he expects current oil prices and the recovery in the financial markets to stimulate offshore oil and gas projects and return the subsea sector to growth, an area it has invested heavily in to extend its capabilities.
“Investments to strengthen Clough’s participation in the subsea and marine construction sector included the acquisition of Ocean Flow International, a Houston-based deepwater engineering specialist and invested in Peritus International, a subsea, pipelines and floating structures engineering specialist,” Clough said.
Monadelphous has had a similar attitude to overcoming the challenges posed by the market’s current state of play.
On the last day of the 2010 financial year, Monadelphous purchased KT Pipeline Services, expanding its service capabilities in the infrastructure market.
The tactic was a successful one, with KT Pipeline services securing a major contract valued at $85 million with Chevron for the Gorgon Gas Project.
A day later, Monadelphous announced the establishment of its infrastructure division consisting of water and wastewater treatment, solid waste management and transmission pipelines.
RCR Tomlinson, which services blue-chip clients, quoted an increase in its order book of 22 per cent to $300 million for the 2009-10 financial year.
The company’s chief executive Paul Dalgleish said after recording positive results for last financial year, RCR will look towards implementing its strategic initiatives within its four businesses of mining, energy, resources and power.
While most companies relay positive outlooks for the year ahead, others are more modest in their predictions.
Perth-based AusGroup expects its activity levels to remain challenging in core markets for the first half of the current financial year.
“The group’s fabrication and manufacturing businesses will continue to be challenged due to low activity levels and ongoing strong competitive pressure from low-cost country competitors,” AusGroup said.
However, the company was bullish about the second half of the year.
“The group’s tender activity is expected to increase strongly in the second half of FY2011 in Western Australia.”
Lycopodium was another Perth company to remain modest in its projections for the 2011 financial year, saying while there are a number of feasibility studies in its pipeline, the prospect of select projects continuing into the execution phase is subject to favourable market conditions.
