Mader, Lycopodium revise FY20 guidance

Mining services companies Mader Group and Lycopodium have downgraded their full-year earnings guidance, citing the impacts of the coronavirus outbreak on their operations.

Perth Airport-based Mader Group said travel restrictions and other COVID-related measures and impacts, including changing workforce availability, had led the company to slash its full-year net profit forecast of $19.3 million to between $17.5 million and $18 million.

Mader Group said its fourth quarter revenue had indicated a lower than expected full-year result of between $270 million and $275 million, compared with its forecast of $279 million.

The revised forecasts, however, still represent an increase on the company’s FY19 results, with Mader Group reporting net profit of $15.2 million and revenue of $229 million.

Mader said its third quarter revenue result for the current financial year had exceeded expectations, with revenue from its Western Australian operations up by 27 per cent on the prior corresponding period to $46 million.

The group reported total revenue of $72 million for the third quarter, up 31 per cent on the PCP.

Mader said without COVID-19, the company would be on target to achieve its FY20 forecasts.

“The principal COVID-19 impacts are temporary closure of the International (non-USA) division, some extra costs due to travel restrictions and changing workforce availability, and a delay in some non-essential maintenance spend by customers,” Mader said.

“The company expects these impacts to reduce as lockdown restrictions are softened.”

Mader has recently renewed contracts with BHP’s Iron Ore, Olympic Dam and Nickel West business as well as with Fortescue Metals Group.

New work secured with BHP Iron Ore at Easter Ridge under a contract valued at around $6.5 million will begin this month.

Mader shares closed up 3.4 per cent to trade at 76 cents.

Meanwhile, East Perth-based Lycopodium says it expects full-year net profit to be $11.5 million, compared with its $14.1 million guidance, withdrawn in March.

The company said the updated guidance was in direct response to COVID-19, citing the impact of commencing new work.

Managing director Peter De Leo said the virus had significantly affected new opportunities coming to market, with projects delayed or suspended.

"We are continuing to work with our people and clients to maintain business continuity and meet our current obligations," he said.

Shares in Lycopodium closed down 2.6 per cent to trade at $4.87.