Civmec targets revenue lift after positive first-half results

Henderson-based Civmec has reported a 38.7 per cent rise in net profit to $8.1 million for the six months to December, sending its shares nearly 9 per cent higher at the market open.

Its revenue, however, nearly halved, to $165 million from $335 million in the first half of 2018.

Civmec, also listed on the Singapore Exchange, said its revenue would increase during the second half of FY20 as major projects under way continued to ramp up.

The company is building Australia’s largest lithium hydroxide plant in Western Australia for Albemarle and an ore processing facility for Fortescue Metals Group’s Eliwana mine in the Pilbara.

Its order book at December 31 stood at $765 million.

Civmec chief executive Pat Tallon said the company had significant work-in-hand across a number of major projects.

“This is further reinforced by our growing capability and client base in the delivery of specialised maintenance and turnaround services for the metals and minerals, and oil and gas sectors, underpinning our strategy to develop consistent, recurring revenue streams for the business,” he said.

Mr Tallon said strong cash generation from operations had also enabled the company to reduce its debt.

Civmec reported $93 million in debt at December 31, down from $98 million at June 30, while cash in hand was $21.6 million, down from $40.6 million.

The company said its 53,000 square metre shipbuilding facility in Henderson was structurally complete, with the internal fitout under way.

The facility will accommodate large vessels and modules for construction and sustainment, and is on schedule for the next phase of the Royal Australian Navy's offshore patrol vessel program.

Under the program, 10 vessels will move from South Australia to WA later this year, which Civmec said would provide a sustained revenue stream for the company until 2029.

Its shares were up 8.9 per cent at 1:20pm AEDT to trade at 48 cents per share.