MND, MONADELPHOUS GROUP LIMITED

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Monadelphous has forecast a 10 per cent boost to sales over the full year due to demand for engineering services from iron ore, lithium, gold and copper miners after delivering an 11 per cent increase in interim net profit to $31.6 million. Dividend increased by 2c to 24c ff.

While the global economic outlook in the wake of COVID19 remains uncertain, the resources sector is expected to provide a steady flow of opportunities for Monadelphous over coming years, the Perth-based engineering group said.

[nipper]

Shares in Perth-based engineering company Monadelphous Group dropped more than 10% on Monday after news broke that it was being sued by Rio Tinto over a fire at one of the Rio iron ore export terminals at Cape Lambert in the Pilbara.

The shares ended at $7.99 as investors assessed the news that Rio is seeking $493 million in damages.

On Friday afternoon Rio filed a writ of summons in the Supreme Court of Western Australia in Perth. In it Robe River Mining and Pilbara Iron are seeking damages over the that broke out on January 10, 2019, at the Port Lambert terminal.

Monadelphous said in a statement that it would contest Rio's action. It said its unit Monadelphous Engineering Associates (MEA) had been performing maintenance shutdown services prior to the fire breaking out. Monadelphous said Rio has claimed that MEA breached terms of a contract with Rio and caused the fire.

Monadelphous Engineering Associates (MEA) had been performing maintenance shutdown services prior to the fire commencing, and Rio Tinto has alleged that MEA was in breach of the maintenance contract, thereby causing the fire, Monadelphous told shareholders this morning.

The fire damaged part of the plant that separates Robe Valley lump and fine products and led to Rio declaring a force majeure on some contracts. The damages being sought largely consist of losses due to the inability to process iron ore during the period of repair work at the facility.

[nipper]

The case for recovery for MND
https://www.sharecafe.com.au/2019/10/31/the...n-monadelphous/

- my favourite exposure to the sector

[nipper]

Mining & Resources

"The resources and energy sector in Australia is expected to provide a solid pipeline of opportunities over coming years as more favourable market conditions return. Project development activity has been increasing with a number of resources construction opportunities coming to market, particularly in the iron ore and lithium sectors. Prospects from further development in LNG production are also expected to be positive in the years to come."
Monadelphous ASX Announcement

"Drilling activity moderated early in calendar 2019, principally due to concerns regarding the global macro environment, which had a short-term impact on capital expenditure and exploration plans."
Bernie Ridgeway, CEO, Imdex Ltd

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Revenue $1.608 billion, in line with guidance provided
- Record revenue in Maintenance and Industrial Services
- Strengthened position in water and renewable energy

Underlying net profit after tax $57.4 million

Final dividend 23c, full year dividend 48 cps, ff

Secured $1.35 bill of new contracts and extensions

[nipper]

Mondium (60% MND) is an engineering, procurement and construction (“EPC”) service provider targeting and delivering EPC projects in the minerals processing sector.

Mondium has been awarded its largest contract to date, valued at approximately $100 million, with Talison Lithium for the design and construction of a new tailing retreatment processing plant at its Greenbushes mine site in the south west of Western Australia.

[nipper]

Monadelphous says it expects 1H19 revenue to be “around 10 per cent less” than the prior corresponding period. This is the first explicit revenue guidance for the period, but it seems to have already been anticipated by the market.

As previously detailed in its results on August 21, it says “project timing and Ichthys run off forecast to result in lower construction revenues in 2018/19.” But it reiterates that the “outlook for resources and energy sectors is positive”, with “maintenance activity forecast to grow” and it says its strong balance sheet “provides capacity for investment.

With the share price down about 9 per cent since the August guidance and more than 7pc of the company sold short, shares have recovered to $14.04 on this news.a

[blacksheep]

In Reply To: blacksheep's post @ Apr 24 2018, 08:06 PM

FWIW - Deutsche Bank rates MND as Downgrade to Sell from Hold

Deutsche Bank was disappointed with the FY18 results, noting a severe earnings hole is emerging in FY19. While the company exceeded FY18 revenue guidance, the broker believes the expectation for construction revenue to decline in FY19 implies double-digit declines in earnings.

The broker believes the stock is expensive and downgrades to Sell from Hold. Target is $11.60.

https://www.shortman.com.au/stock?q=mnd

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[blacksheep]

Announcement in after the market close......

Monadelphous Contracts Update

Engineering company Monadelphous Group Limited (ASX:MND) (“Monadelphous” or “the Company”)
today announced it has secured new contracts in the resources and infrastructure sectors with a
combined value of approximately $100 million.

The Company’s renewable energy business, Zenviron, has secured a contract for balance of plant
works associated with the 150MW Moorabool North Wind Farm Project for Goldwind Australia. The
project is located 5km south of Ballan, Victoria and is expected to be completed in December 2019.

In addition, the Company has been awarded various structural, mechanical, piping, electrical and
instrumentation integrated packages of work under an existing panel contract with BHP for its iron ore
operations. The work will be performed at a number of BHP sites in the Pilbara region of Western
Australia and is expected to be completed in 2018.

Lastly, the Company has received an order from Australia Pacific LNG, under an existing agreement,
for the supply of additional wellhead skids.

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[nipper]

....first-half profit rose by 32 per cent, reflecting a recovery in the global resources industry. MND reported a net profit of $37.6 million for the six months through December, up from $28.6 million in the same period a year earlier.

"The strong performance reflects solid revenue increases in the company's core resources and energy markets in Australia and was impacted by the high volume of contracts secured over the past 18 months, an increase in demand for maintenance services and growth from diversification into overseas and infrastructure markets," said Monadelphous.

"Increased construction activity levels, particularly in oil and gas, water and renewable energy, and a record sales performance from our maintenance services business contributed to the result."

The company was upbeat on the outlook, forecasting a 30 per cent rise in annual revenue over the fiscal year. Half-year revenue increased by 35 per cent to $849.7 million.

It will pay an interim dividend of 30c a share, up from 24 cents a year ago.