With a A$850 million order book and a state-of-the-art assembly and maintenance hall on track for completion in FY2020, dual-listed construction and engineering group Civmec (ASX: CVL, SGX: CIVM) is well positioned to capitalise on significant opportunities in the marine and defence, resources, oil and gas, and infrastructure markets.
The company – which is celebrating its 10th anniversary this year – recently reported full year 2019 figures which highlight Civmec’s focus over the past twelve months of strengthening the balance sheet, improving operating cashflow and lowering debt.
Net cash from operating activities was $78.9 million for the year with $40.7 million cash in bank at 30th June 2019. Revenue for the period came in at $488.5 million, while EBITDA was $24 million and NPAT was $7 million.
Importantly, Civmec’s order book at end of FY2019 was A$819.0 million, up from A$700.0 million at the close of FY2018, highlighting it was delivering on its opportunities with key clients and establishing consistent and recurring revenue streams.
In response to FY2019 results, the Civmec executive chairman James Fitzgerald was quick to stress that FY2019 was a year of consolidation in which Civmec focused on completing a number of significant projects.
“Starting FY2020 with a strong order book, and with approximately $120 million of new work secured since the beginning of this financial year, our focus remains on providing quality, value-for-money engineering solutions for our clients, whilst maintaining a disciplined approach to capital and overhead management, to maximise shareholders’ returns,” he said.
This included the award of significant scope from Albemarle, in the delivery of Australia’s largest lithium hydroxide plant being constructed south of Perth, including site civil works and fabrication and onsite installation of the plant’s structural, mechanical and piping works.
Civmec was also awarded two separate major fabrication and modularisation packages, one directly with BHP and the other for thyssenkrupp, to support the delivery of BHP’s flagship South Flank iron ore mine in the Pilbara.
To take advantage of the growing pipeline of resources and oil and gas projects that require specialised shutdown and maintenance services, Civmec has also strengthened its maintenance service offering.
This included the launch of a joint venture with Brown & Root (Brown & Root Civmec) securing a contract to support Chevron assets until the end of 2020, including the Gorgon and Wheatstone LNG facilities.
Most recently Civmec was awarded by FMG to deliver the Primary Crushing and Ore Processing Facility for its new Eliwana Mine and Rail project.
Civmec’s Chief Executive Officer Patrick Tallon is optimistic about the pipeline of opportunities thanks to the growing investment in Civmec’s primary operating sectors.
“We will continue to pursue construction and maintenance projects with key clients, leveraging our multi-disciplinary, self-performance capability to provide them with partial or total delivery solutions,” he said.
“With the completion of our new world-class assembly and maintenance hall during FY2020, our facility at Henderson will be the largest undercover modularisation and maintenance facility in Australia, ensuring we are well positioned to capitalise on these opportunities.”
Last year, Civmec was awarded the contract to supply and processing of steel for 12 of the Royal Australian Navy’s Offshore Patrol vessels with Civmec to provide fabrication and construction activities for 10 of the vessels.
Delivery of the Royal Australian Navy’s OPV program will be ongoing until 2029, also providing a sustained revenue stream over this period.