Monadelphous shares lift as contract wins impress analysts
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More news: Shares in Monadelphous Group advanced on the ASX after the engineering firm said it has been awarded $230 million worth of new construction and maintenance contracts.
Shares were up 1.2% to $12.47 by 1:05pm AEST.
Citi analysts noted that while Monadelphous is "not perfectly immune" to iron ore price movements, they see the risk of significant deferral in near-term iron ore opportunities relating to replacement and sustaining capital expenditure to be "meaningfully lower" compared to larger iron ore construction opportunities.
With ASX rival NRW Holdings claiming there are "ample civil iron ore opportunities in Western Australia", Monadelphous should see these crystallise in the near term, the analysts said.
What they said: "We continue to see ample opportunities, not just limited to iron ore, that should keep [Monadelphous]'s order book buoyant particularly with respect to [engineering and construction]", said Citi analysts.
"This is demonstrated in contract awards announced today," they said.
Monadelphous wins orders worth $230 million
The news: Engineering firm Monadelphous Group said it has been awarded several new construction and maintenance contracts.
The numbers: The new contracts are worth a total of $230 million, the company said.
The context: Monadelphous said its civil business Melchor has won a construction contract from Saipem Clough Joint Venture at Project Ceres, a urea plant near Dampier in Western Australia, with work expected to be completed midway through 2025.
In addition, Monadelphous’ heavy lift services joint venture, Alevro, has also been awarded a contract by Saipem Clough to provide heavy haulage services at Project Ceres.
The company has also secured a multidisciplinary construction contract at BHP’s Prominent Hill Expansion Project in South Australia, with work expected to be completed in the second half of 2025.
Monadelphous has secured a three-year contract, with two one-year extension options, to continue maintenance and shutdown services at South32’s Worsley Alumina operations in WA.
The source: ASX announcement
