SERVICES company Valmec has provided a trading update and earning guidance for the half year ending 31 December 2015 predicting revenues of between $30 million and $33 million.
With an order book underpinning the half year, Valmec said it expects an earnings before interest, tax and depreciation and amortisation (EBITDA) margin in the range of 6 per cent to 8%.
In addition, Valmec said it expects to utilise the benefits of its unused tax losses in respect of its entire profit for the period.
Valmec expects that demand from its target markets, which include smaller energy and infrastructure “stay in business” EPC projects, service and maintenance contracts and product delivery, will remain solid over the short to medium term, the company said in its September announcement.
Tendering by the company will continue on a number of oil and gas, resources and infrastructure projects across Australia, with major coal seam gas to liquefied natural gas projects expected to come online over the next two years.
Valmec is expecting to benefit from the expected growth in operations support, maintenance and upstream infrastructure works.
An opportunity pipeline of about $650 million of projects due to be delivered over the next three years according to Valmec supports this outlook, as well as, expanded earnings contributions from its services and operations business.
In addition, the ongoing development of its resources and government infrastructure services capabilities and order book, and a diversity of clients will support Valmec’s outlook.
Subject to there being no significant delays in project go-aheads, Valmec expects the second half of the 2015-2016 financial year will deliver about 25% greater revenues than the first half.
There will also be an incremental increase to EBITDA as a result of increased scale and enhanced cost and productivity gains, subject to no significant project delays, Valmec said.
Increasing scale in its operations over the next three years while delivering a sustainable level of profitability is a significant focus for the company.
Valmec is pleased to announce the continuation of its dividend program and the declaration of a final dividend for the 2014-2015 financial year.
A fully franked final dividend of 0.5 cents per share was declared by the board as the final dividend for the financial year 2015.
The dividend will be paid to shareholders on 30 October 2015, with a record date of 30 September 2015 and the combined total dividend for the full year was 1 cent per share.
This came after the company announced a net profit of $5.75 million for 2014-2015, up 13% on the previous year.
Valmec had secured about $64 million of new contracts and contract variations over the course of the year.
This was on the back of $50.4 million in revenue, with 27% of this generated by Valmec Services, fomerly known as Exterran Australia.
Valmec employs around 150 project and support personnel, operating out of offices and facilities in Western Australia, South Australia and Queensland.