Australia's Monadelphous hits 1-year low on loss of Albemarle contract

Monadelphous

01/08/2024 06:32

By Aaditya GovindRao
       Aug 1 (Reuters) - Shares of Australia's Monadelphous
Group  MND.AX  plunged around 8% to their lowest in more than a
year on Thursday after the world's largest lithium producer,
Albemarle Corp  ALB.N , terminated its contracts with the
engineering company.
    The Perth-based firm's shares fell as much as 7.9% to
A$11.950, the lowest level since July 11 last year. This put the
firm among the top three losers in the benchmark  .AXJO , which
has scaled a fresh peak today rising as much as 0.7%.
    The company's shares also marked their worst intraday drop
since February last year. More than 950,000 shares changed hands
by 0507 GMT, over thrice the 30-day average volume.
    Albemarle launched a review of its cost and operating
structure on Wednesday, which included immediately shutting down
construction work at a new train at its Kemerton lithium
processing site in Australia.
    Monadelphous, which had been contracted with construction
works for the train, said the termination reduces its current
construction work-in-hand by about A$200 million ($130.62
million). 
    It anticipated the project delivering an aggregate revenue
between A$75 million to A$85 million for fiscal 2025, it said.
    "Albemarle's decision provides the market with another
reason to take a glass half-empty view," analysts at Citi wrote
in a client note.
    "Given the robust pipeline of construction opportunities, we
think MND could move relatively quickly to pursue and secure to
fill in the void with capacity that has been freed up at
Kemerton," they added.   

($1 = 1.5312 Australian dollars)

 (Reporting by Aaditya Govind Rao in Bengaluru; Editing by
Janane Venkatraman
)
 ((Aaditya.GovindRao@thomsonreuters.com;))