The local contractor pulls together an earnings turnaround and is confident in the ‘wide scale reset’ of its operations, but will book another loss for 2023.
The local contractor pulls together an earnings turnaround and is confident in the ‘wide scale reset’ of its operations, but will book another loss for 2023.
Decmil’s full year results for the year ended June 30 2023 released to the market on Wednesday revealed the contractor had managed to pull back after tax losses of $103 million in the previous year, to $1.8 million.
That followed a turnaround in EBITDA which went from $44 million in the red this time last year to $9 million in the black, with revenues lifting 29 per cent to $489 million.
The first six months of the financial year were lossmaking for Decmil, but the contractor managed to deliver a $600,000 profit for the latter half.
Cashflows were buoyed during the period by a $26.3 million capital raising.
Chief executive Rod Heale said Decmil had the financial strength to work towards profitable revenue growth.
“After a wide scale reset of our operations, FY23 marked a phase of financial recovery against the backdrop of a challenging operating and financial environment," he said.
“In FY24, we will be laser focused on continued elevation of gross margins and replenishing our order book in line with our highly selective tender strategy."
Decmil was recently awarded work on Perdaman's urea project, bringing its total order book to $550 million.
“We are anticipating a buoyant tender pipeline across the core civil infrastructure and resources sectors, as inflationary pressures gradually ease and population growth trends upwards.”
Auditors at RSM noted that the company’s ability to operate as a going concern was dependent on managing cashflows and debts to deliver contracted projects.
Decmil’s recent capital raising as well as the long-expected sale of its Homeground Accommodation precinct in Queensland were also noted by auditors.
A Decmil spokesperson told Business News the Homeground sale had advanced positively over the financial year and that the company had received interest that had progressed to an ‘advanced stage’.
“In order not to jeopardise these negotiations we have refrained from providing fulsome commentary in our results materials,” the spokesperson said.
“If a binding agreement is reached we will inform the market as per our continuous disclosure obligations.”
The contractor has flagged in consecutive annual reports that it expects to sell the asset, but has thus far been unsuccessful.
Decmil shares closed Wednesday's trading day flat at 18 cents.
