18/08/2020 - 15:44

Monadelphous shares up on full year results

18/08/2020 - 15:44

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Engineering group Monadelphous has reported a rise in revenue for fiscal 2020, despite saying its second-half performance was significantly affected by COVID-19.

Monadelphous shares up on full year results
Rob Velletri says Monadelphous is well positioned to capitalise on opportunities. Photo: Gabriel Oliveira

Engineering group Monadelphous has reported a rise in revenue for fiscal 2020, despite saying its second-half performance was significantly affected by the COVID-19 pandemic.

Monadelphous reported revenue of $1.65 billion in the 12 months to June 30, up 2.6 per cent on FY19.

Most of the revenue came from the company’s maintenance and industrial services division, which reported revenue of around $1 billion in FY20, up 5.1 per cent on FY19.

Victoria Park-based Monadelphous attributed the rise to shutdown and maintenance contracts including with BHP Nickel West, Incitec Pivot and Rio Tinto.

Monadelphous' engineering construction division reported revenue of $615.9 million in FY20, in line with the prior period, while its statutory revenue – which includes revenue from joint ventures – was around $1.5 million.

The company's shares were up by as much as 19.5 per cent today, trading at $10.12 at 2pm AEST.

Monadelphous' share price, however, is yet to bounce back from the onset of COVID-19 in February, with the company trading at around $17 per share at the beginning of the year before reaching a low point of $8.80 in March.

Monadelphous said its performance in the second half of FY20 was “significantly affected by the economic and social impact” of the virus, with the company taking COVID-related measures including a deferral of and reduction in services.

This was reflected in its underlying earnings, with Monadelphous reporting $59.1 million in the first half of FY20 and only $33 million in the second half.

Its net profit after tax was $36.5 million, down 36 per cent from $57.4 in FY19.

Despite the lower profit, managing director Rob Velletri said Monadelphous was well-positioned to capitalise on opportunities and deal with challenges ahead.

“While the global economic outlook in the wake of COVID-19 remains uncertain, the resources sector is expected to provide a steady flow of opportunities over coming years,” he said.

The company recently secured $100 million in work with the likes of BHP, New Zealand-based Custom Fleet, and Chilean businesses Minera Escondida and GNL Quintero.

Its shares closed up 19 per cent to trade at $10.05 each.

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