Decmil, OTOC up on higher profits

Mining-focused construction contractors Decmil Group and OTOC Group have both enjoyed share price gains after reporting strong annual profit results.

Decmil has announced a preliminary net profit for the 2012 financial year of around $35-36 million, an increase of up to 53 per cent year-on-year.

The company’s earnings before interest tax depreciation and amortisation for the period should be between $53-54 million on revenue of around $550 million, representing a 40 per cent increase on last year and ahead of previous market guidance.

 Decmil also posted a net cash position at June 30 of $125 million and said it expects to continue operating with a strong balance sheet which will allow it to pursue its future growth opportunities.

 Decmil Group chief executive Scott Criddle said it had been a strong year of growth for Decmil.

 “We continued to win major contracts as a result of our long-term relationships with the leading companies in the resources sector,” Mr Criddle said.

 “We have also expanded into new markets including the development of the Calliope accommodation village in Gladstone, Queensland, which is delivering a recurring revenue stream.”

 The results come during a period when Decmil was awarded a $30 million contract by Rio Tinto to construct a workshop as well as refuelling and storage facilities for Rio’s fleet of heavy mining equipment at the Marandoo mine in the Pilbara.

In January it was also awarded a $94 million contract by BHP Billiton to build and design an accommodation village at Port Hedland

The company will release its 2012 financial year results on August 23.

Meanwhile, OTOC Group has posted earnings before interest and taxes of around $7 million on revenue of $158 million.

The figures are based on current management accounts for the 2012 financial year and are subject to the finalisation of full-year
accounts.

It comes during a period when OTOC was awarded a $14 million contract by Rio Tinto Iron Ore to install transportable accommodation buildings
and infrastructure upgrades to the West Angeles village.

OTOC chief executive Adam Lamond said the results represented a marked improvement over the December half and reflected
initiatives to better motivate revenue.

Decmil shares closed 16c higher to $2.50 per share while OTOC shares added 2c to close at 10c each.