Australia's Monadelphous surges as annual earnings, dividend beat estimates

Monadelphous

20/08/2024 05:50

By Ayushman Ojha
       Aug 20 (Reuters) - Engineering firm Monadelphous Group's
 MND.AX  shares were poised to gain the most in nearly two years
on Tuesday as the company's annual earnings and dividend payment
came ahead of analyst expectations.
    The stock jumped 10% to A$13.0 as of 0402 GMT, set for its
best intraday gain since Aug. 23, 2022.
    The company reported a 16% jump in earnings before interest,
taxes, depreciation, and amortization (EBITDA) to A$127.4
million ($85.59 million) for the year ended June. It beat Citi's
estimate of A$123 million.
    It also posted a record annual revenue in its Maintenance
and Industrial Services division on continued strong demand for
maintenance services and higher levels of activity in the
engineering construction sector.
    "Despite ongoing short-term global uncertainties and
cautious sentiment, the resources and energy sectors continue to
provide a significant pipeline of opportunities, with projects
related to decarbonisation making up an increasing share of
capital expenditure forecasts," the company said.
    Monadelphous is well-positioned to continue to deliver
topline growth into fiscal 2025, given no shortage of
opportunities, analysts at Citi said in a note.
    "Further, we note that there is no mention of skilled labour
shortage or challenge in the releases, which is pleasing."
    The Perth-based firm also declared a final dividend of 33
Australian cents per share, taking the full-year payout to 58
cents, higher than Citi's view of 50 cents.
    The dividend is well ahead of expectations, which we think
indicates a progressively improving outlook for MND, added Citi
analysts.
    The company has secured more than A$3 billion worth of
contracts in fiscal 2024, up from A$2 billion secured in fiscal
2023.
    "Market opportunities remain strong with further contract
awards expected over coming months," the company added.
 
($1 = 1.4885 Australian dollars)

 (Reporting by Ayushman Ojha in Bengaluru; Editing by Janane
Venkatraman)
 ((Ayushman.Ojha@thomsonreuters.com;))