Civmec profit, costs up

Perth-based engineering and construction contractor Civmec has reported a 37.7 per cent rise in net profit for the September quarter to $S11 million, and a 140 per cent leap in revenue to $S170.2 million.

The recorded revenue was slightly above the company's achieved $S166.7 million in revenue in the first quarter of the 2014 financial year.

In its report, Civmec said gross margins for the quarter of 11.7 per cent were higher than normal as a result of a number of contracts being completed in the period.

However, the company reported a surge in finance costs to $S742,000, up from $S383,000 in the previous corresponding period.

The Singapore Stock Exchange-listed company said fully diluted earnings per share increased to $S0.022, up from $S0.016 in the July-September quarter last year.

“Cash and cash equivalents remained healthy at $S22.7 million as at 30 September,” Civmec said in a statement.

However, it reported $S8.2 million in cash generated for the quarter, which was far lower than the $S42.5 million it recorded this time last year.

"The reduction can be attributed to significant recepits being received early in the FY15 second quarter from clients," Civmec said.

"On a normalised basis the cash inflow into the business was in line with previous periods."

Civmec won a contract in August to provide fabrication and testing of subsea components for Shells Prelude Floating LNG development in the Browse basin, and the Chevron-operated Wheatstone LNG project for undisclosed amounts.

In December last year, Civmec won a bid to provide precast works for Leighton Contractors at Inpex’s Ichthys onshore LNG facilities in Darwin for an undisclosed amount.

A month earlier it was awarded a $S65 million contract to provide procurement, fabrication, modularisation, delivery onsite civil work and electrical and instrumentation work at Rio Tinto’s Nammuldi Below Water Table iron ore project in the Pilbara.

The company said it was continuing to focus on expanding its presence in Australia and internationally, and was actively pursuing merger and acquisition opportunities.

“We have recently strengthened our Singapore and South East Asia presence with the appointment of a regional manager,” the company said.

“This will be used as a platform for both organic growth and acquisition opportunities in South-East Asia.

Civmec chairman James Fitzgerald said the company was in good position to pursue business opportunities in Australia’s public infrastructure sector, as well as the resources industry, as it shifted towards operating expenditure investments.

The company said it has an order book of $S213 million as at the end of September.