Advisers have been appointed for a potential sale of Seven Group’s share of the Crux LNG project, managing director Ryan Stokes has said, while flagging deals around Coates and WesTrac.
Advisers have been appointed for a potential sale of Seven Group’s share of the Crux LNG project, managing director Ryan Stokes has said, while flagging deals around Coates and WesTrac.
Crux will be a brownfields development to supply gas to Shell’s Prelude floating LNG vessel, with Seven Group holding a 15 per cent stake.
Shell is the operator of Crux.
Mr Stokes said Crux was moving through to a final investment decision, with front-end engineering and design completed.
“We have appointed advisors to explore a sale of Crux as we approach final investment decision,” he said.
“We are also actively looking at adjacent opportunities for WesTrac and Coates.”
Seven Group has already divested $120 million from its portfolio this financial year.
The company has recently lifted its stake in Beach Energy, which has a half share of the Waitsia project with Mitsui & Co, and successfully embarked on a bid to secure control of industrials company Boral.
Mr Stokes said Seven Group now owned 70 per cent of Boral.
“The expected tightening of the east coast domestic gas market led us to acquire strategic shareholdings in both Beach Energy and Drillsearch,” he said.
“Dislocations in price have given us the opportunity to acquire more shares in Beach, with [Seven Group] now owning a 30 per cent stake.
“This shareholding provides us with an exposure to both east coast gas market, as well as export LNG from the Waitsia field in the Perth basin where the infrastructure for distribution to process already exists.”
Operations
Mr Stokes said equipment dealer WesTrac was benefitting from strong mining and construction demand.
"We have seen some supply chain pressures, including port disputes, shipping delays, and (Caterpillar) machine and parts supply constraints," he said.
"We are working closely with (Caterpillar) as they look to manage the impacts."
The Westrac business was expected to achieve low single digit EBIT growth in the 2022 finanncial year, he said.
The company generated 70 per cent of revenue through mining customers, largely iron ore, Mr Stokes said.
Coates, an equipment hire business, was likely to achieve high single digit EBIT growth.
"Coates delivered Q1 results in line with budget, notwithstanding the impact of lockdowns,"he said.
"We are seeing strength in Queensland and WA whilst NSW and Victoria are showing strong signs of recovery.
"Pleasingly, the level of activity and demand, driven by the acceleration of projects, has resulted in an increase in time utilisation approaching 60 per cent."
