Australian industrial services company WestStar Industrial Limited (ASX: WSI) has confirmed it has secured a number of new projects and executed a new strategy to deliver sustainable earnings in FY22 and in future full years.
WestStar’s wholly owned construction and mining services contractor business SIMPEC was recently awarded a $145 million contract for the Iron Bridge Magnetite Project, a joint venture between Fortescue Metals Group subsidiary FMG Magnetite Pty Ltd and Formosa Steel IB Pty Ltd.
This award follows from the recent project announcement for a $10 million contract by EPC Contractor, Acciona, for the Avertas Energy Project.
Both contracts have already commenced with the majority of works expected to be delivered during FY22.
The works include structural, mechanical and piping (SMP), electrical, instrumentation and controls (E&I), and non-process infrastructure (NPI) projects.
SIMPEC will supply vertical construction services for the Iron Bridge Magnetite Project works, with an anticipated workforce of more than 500 personnel. This intricate project consists of major module installation, tank installation, major mechanical installation, large bore piping and a significant portion of supply and installation of electrical and instrumentation works.
In addition, WestStar’s wholly owned subsidiary Alltype Engineering continues to build its pipeline of new work opportunities, with works being tendered and developed increasing in both value and complexity as well as geographical location.
The engagement with existing and new customers on these works reflects Alltype’s expanded offerings and reputation for reliably delivering projects with a significant control over the project supply chain lifecycle.
The rapid growth of the two business units has allowed WestStar to scale significantly by building on its strong reputation while delivering growing revenue and profitability.
The recent contract awards reflects that both company’s revenue streams are totally independent of one another, showing both the flexibility of the group and ability for each standalone business to operate within their respective areas of core expertise.
Since admission to the ASX, WestStar Industrial has continually grown its revenue and order book providing a diverse suite of services covering engineering, fabrication, construction and maintenance services to the resources, energy and infrastructure sectors.
During a relatively short period the Company has achieved significant milestones in proving its ability to deliver on a large scale, having consistently grown its revenue model year on year. The successful acquisition of business units SIMPEC and Alltype Engineering along with the ability to on board and retain key personnel and experienced staff, has enabled the Group to become more diversified capitalising on the strong market opportunities here in Western Australia, while building on a national strategy.
An impressive history of project delivery continues to transform WestStar Industrial as a preferred contractor in the delivery of engineering, fabrication, construction and maintenance services solutions to the resources, energy and infrastructure sectors.
Since the commencement of FY22, WestStar has delivered transformational changes to the Company’s forward order book. The work in hand position has increased rapidly since the commencement of the financial year. Contract wins announced since July 2021 to date and
Work in Progress for FY22 total $185M as follows:
- Acciona Waste to Energy circa $10M
- Iron Bridge Magnetite Project circa $145M
- Works in Progress circa $30M
The current revenue awarded of $185M is a blend of NPI, SMP, E&I and fabrication works and will be performed for more than 20 clients (including Majors Tier 1 Clientele) over a range of projects and commodities.
The Company sees itself in a very favourable and unique position where it is not only providing record revenues for FY22, but also ongoing sustained earnings that will commence flowing into FY23. This secured volume of work provides the Company with the opportunity to demonstrate sustained earnings over a greater period of time not seen before in the company’s history.
CEO, Robert Spadanuda, said WestStar Industrial continues to develop and strengthen its overall business capability to move further into the Infrastructure, Mining and Minerals, Energy and Renewables industries throughout Australia.
“We believe our overall focus on supporting our clients on both major projects and term sustaining capital contracts will further enhance the groups positioning for FY22 and beyond.
“Tendering and proposals across the Group remains strong, as we consistently deliver projects at a high standard. We are now starting to see the engagement of ECI prospects across a variety of disciplines based upon a history of delivery and management experience and expect this maturity phase of the growth to deliver longer term sustainable earnings.
“A well-balanced portion of all submissions continue to be from both repeat and new clients within the resources, petrochemical, mining, infrastructure and oil and gas sectors and beyond. The results of increased activity and tendering is now already positive outcomes for the business and providing a strong platform for the business to transform to the next level.”