16/02/2010 - 09:05

Monadelphous surges on record result

16/02/2010 - 09:05

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Shares in Monadelphous were higher after the engineering services company delivered a record half-year profit of $40.5 million, boosted by growth in the energy and infrastructure sectors.

Shares in Monadelphous were higher after the engineering services company delivered a record half-year profit of $40.5 million, boosted by growth in the energy and infrastructure sectors.

The Applecross-based company said its after tax profit for the six months ending December 2009 of $40.5 million was 10 per cent higher than the previous corresponding period.

The record result was on a 10.1 per cent lift in sales revenue to $619.5 million, driven by continued high activity in its engineering construction division which booked record sales of $438.3 million, up 17.4 per cent.

The division was awarded more than $250 million in new construction contracts across the resources, energy and infrastructure sectors during the period.

Meantime, the company's managed and industrial services division recorded sales revenue of $176.9 million, down 7 per cent.

Earning before interest, tax, depreciation and amortisation for the company was up 12.4 per cent to $64.2 million while margins were steady at 10.4 per cent.

Earnings per share rose 8.2 per cent to 47.3 cents.

The board has declared an interim dividend of 35c per share, fully franked, up 16.7 per cent.

"The company's strategies in recent years to diversify outside traditional resources markets, focus on organic growth and strengthen relationships with blue chip customers have translated into strong results in the first half," Monadelphous managing director Rob Velletri said.

"While Monadelphous is a leading participant in resources, particularly iron ore, a continuing trend has seen the share of group sales from the energy and infrastructure sectors grow to 32 per cent in the first half. Four years ago those combined market sectors comprised 6 per cent of total sales.

"The energy sector share of revenue has grown to 27 per cent, more than four times that of the 2006/07 full year period.

"Strategic milestone contracts awarded in the past year from blue chip clients such as Woodside and Chevron have seen the company strongly positioned to take advantage of the growing opportunities ahead in the oil and gas sector."

He added the company will renew its focus on recruitment and retention strategies, as skilled labour shortages within the engineering and construction industry have re-emerged in recent months.

Monadelphous currently has a 4,632-strong workforce.

Shares in Monadelphous climbed $1.34, or 10.6 per cent, to a high of $14.01 before easing to $13.98 at 11:39 AEDT.

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