Civmec Limited has reported earnings of A$8.9 million for the 3QFY2021 ended March, 121.9% higher than earnings of $4 million in the year before.
Earnings for the 9MFY2021 stood at A$24.0 million, 99.1% higher than earnings of A$12 million.
In its business update for the 3QFY2021, the group saw sales revenue surge 92.6% y-o-y to A$183.9 million while gross profit increased 86% y-o-y to A$19.2 million.
EBITDA nearly doubled to A$19.4 million from A$9.8 million, while net profit after tax (NPAT) more than doubled to A$8.9 million from A$4 million.
For the 9MFY2021, revenue increased 87.1% y-o-y to A$489.6 million, while gross profit increased 85.7% y-o-y to A$53.8 million.
EBITDA for the 9MFY2021 increased 95.4% y-o-y to A$53.7 million while NPAT increased 99.5% y-o-y to A$24.0 million.
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The group’s net asset value (NAV) per share stood at 55.68 Australian cents in the 9MFY2021 compared to the previous year’s 35.77 Australian cents.
The group says it has made the “first significant step” towards establishing a “permanent Civmec owned and operated” facility in the Pilbara region of Western Australia.
Pilbara is where most of the group’s construction and maintenance activities are delivered.
On the facility, the group says it believes the “time is right” to do so in order to support its clients’ various projects and the local community.
To this end, Civmec has agreed to purchase five hectares of land in the industrial area of Wedgefield in Port Hedland.
The decision for the location was due to the port location for Civmec’s existing blue-chip clients such as BHP, Fortescue and Port Hill.
Port Hedland is also near other resources and energy clients such as Rio Tinto and Woodside.
The group will also be building a “suitably sized facility” at Wedgefield that will have fabrication and maintenance capabilities and provide a base for clients to access a local labour pool for their short- and long-term requirements.
The group expects to spend around A$10 million in the Port Hedland investment over 18 months.
The investment is expected to generate a positive return on capital over the coming years.
The group says it has been growing its maintenance revenue y-o-y, with the remaining gap in activities being in the capital works space.
As such, two key managers – Mylon Manusiu and Daniel Kennedy – have been appointed to fill the gap.
Manusiu will oversee maintenance and capital works in the refineries and smelters plants while Kennedy will be responsible for maintenance and capital works in the resources and energy areas.
Manusiu will focus on opportunities around the Newcastle area and seek to increase facilities from its Gladstone facility in Queensland.
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Kennedy will look out for opportunities in the ports and process plants throughout Western Australia and any available opportunities once the Port Hedland facility is constructed.
In addition, Civmec has been shortlisted as one of two construction consortiums to be considered for the Causeway Bridge in the Perth metropolitan area.
Citing the many opportunities for projects as infrastructure spending across Australia is being fast tracked by state and federal governments, the group says it is well-positioned to seize such opportunities as a Tier-1 contractor.
This should enable the group to increase manufacturing activities from its locations in Western Australia and New South Wales.
Civmec’s order book as at March 31, stood at A$1.11 billion due to strong tender activities across all sectors on the whole.
The group says it is “confident” that it will continue to generate solid returns for its investors in the FY2021/2022.
“We continue to have early contractor involvement with many existing and new clients across various commodities for future opportunities, and fully expect to continually replenish our order book,” it writes in its May 27 update.
Shares in Civmec closed 2 cents higher or 3.5% up at 58.5 cents on May 27.
