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Engineer Monadelphous posts profit fall

Simone Ziaziaris  |  22 Aug 2017Text size  Decrease  Increase  |  

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SYDNEY - [AAP] Engineering services firm Monadelphous Group's (ASX: MND) annual profit has fallen 14 per cent as competition and reduced spending by customers put pressure on its margins.

The company provides construction, maintenance, and industrial services, and made a net profit of $57.6 million in the year to June 30, down from $67 million in the prior year.

It said a fall in activity in the construction market was partially offset by increased maintenance activity.

The maintenance division of the business achieved revenue growth of 7 per cent, on the back of increased activity in the resources and energy sectors.

Monadelphous said prospects for maintenance services continue to be strong, with revenues from oil and gas services expected to grow as new offshore projects are commissioned and production commences.

Monadelphous also said it has substantial capacity to invest in new business opportunities, particularly in the infrastructure sector.

The company said market conditions in the Australian resources and energy sector have stabilised, and it expects an increasing number of resources construction opportunities in the coming years.

Monadelphous shares were up 63 cents, or 4.6 per cent, at $14.39 at 1500 AEST.

WEAK RESOURCES SPENDING HITS MONADELPHOUS:

* Net profit down 14pct to $57.6m

* Revenue down 8.7pct to $1.25bn

* Final dividend down 2 cents at 30 cents, fully franked

 

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