VDM Group has announced $27 million in new contracts, including a $17 million deal with Rio Tinto and $10 million in work with Western Power and CBH Group.
For Rio Tinto, VDM will design and construct a plant maintenance workshop, heavy vehicle refuelling facility and additions to the existing work camp for the Brockman 4 mine in the Pilbara.
The contract will have a peak workforce of around 80 people, and is due to commence in late July.
Also today, VDM said its Western Operations had been awarded a number of bulk earthworks jobs for residential subdivisions, as well as contracts from Western Power and CBH.
The recent contract wins take the company’s work in hand to more than $170 million.
VDM downgraded its earnings guidance for the second half of this financial year last week, after taking a near-$5 million write-down on one of its projects.
Patersons Securities analyst David Gibson said while the downgrade was disappointing, the broker maintained a speculative buy recommendation as it believed it was an isolated case.
“We note the rest of the company’s contracts are performing at better margins than we had previously anticipated, which bodes well for profitability going forwards,” Mr Gibson said.
At 2:00PM, WST, VDM stocks had gained 2.44 per cent, trading at 4.2 cents.
