- Decmil Group (DCG) is expecting improved margins and robust EBITDA of between $6 million and $10 million for the 2021 financial year
- The projection follows Decmil’s strong operational performance at current and completed contracts over the current financial year
- It comes despite the company anticipating lower than expected revenue for FY21 of between $300 million and $320 million, due to COVID-19 impacts
- Decmil, as part of the Matagarup Heirisson Alliance, has been shortlisted for a contract to construct the new Swan River Causeway Bridge in Perth
- Decmil shares are down 3 per cent at 48.5 cents each
Decmil Group (DCG) is expecting improved margins and robust earnings before interest, taxes, depreciation and amortisation (EBITDA) of between $6 million and $10 million for the 2021 financial year (FY21).
DCG offers a range of services to the Australian resources and infrastructure industries, including engineering and construction, accomodation services and maintenance.
The projection follows Decmil’s strong operational performance at current and completed contracts over the current financial year.
It comes despite the company anticipating FY21 revenue of between $300 million and $320 million, which falls below initial expectations.
DCG says the reduction in revenue is the result of COVID-related impacts delaying the award of several contracts tendered to FY22, thereby shifting the associated revenue to next financial year.
As a result, the company intends to bolster its preferred and contract work in-hand beyond its current figure of $590 million, to cascade through to increased revenue and EBITDA for FY22.
The company currently has preferred and contracted work in hand of around $400 million for the 2022 financial year.
Decmil CEO Dickie Dique commented on the projections.
“We have been able to maintain our EBITDA guidance because our project teams are operating very efficiently, increasing the earnings margins for work performed and because we have tightly managed corporate overhead costs,” he said.
“COVID-19 related delays have shifted the estimated award of several contracts, and therefore associated revenue, into FY22.
“An increase in anticipated revenue for FY22, in tandem with our strengthened order book from the recent contract wins, pivots Decmil towards a very strong FY22 and beyond.”
Matagarup Heirisson Alliance shortlisted for causeway contract
Meanwhile Decmil, as a part of the Matagarup Heirisson Alliance, has been shortlisted for a contract to construct the new Swan River Causeway Bridge in Perth.
The company forms the alliance alongside Arup and SRG Global.
The new bridge will comprise two river crossings, measuring 250 metres on the Victoria Park side and 140 metres on the City of Perth side, and will be connected by a 270-metre path through Heirisson Island.
Dedicated pedestrian and cycle lanes have been designed to provide safe access for more than 1400 cyclists and 1900 pedestrians using the path over the causeway daily.
Decmil anticipates a contract will be awarded later this year, ahead of construction, which is expected to begin mid-2022.
The project is jointly funded by the Federal Government and WA State Government, with each committing $25 million.
Shares in Decmil were down 3 per cent at 48.5 cents at 10:44 am AEST.