• Mining services stocks go wild with FY results, acquisitions, guidance beats and misses
  • Yancoal tanks as investors boo dividend chop
  • Regis drama keeps rolling on

 

It’s the national day of the mining services provider, or something like that, with a bunch of contract diggers, drillers and haulers dropping their FY24 results on a welcoming ASX.

Looking for a narrative here? It’s incoherent, with a range of outcomes across the spectrum from the very good (hello Monadelphous Group (ASX:MND)) to the very bad (sorry Mader Group (ASX:MAD)).

Monadelphous was among the top performers on the ASX today, climbing by close to 10% on the back of a bonanza FY24, which saw it pull in over $2bn in revenue, up 11% on the year.

While miners are starting to suffer from inflation and lower prices, the listed service providers are still enjoying the aftermath of the boom.

MND lifted NPAT by 16.2% to $62.2 million, with maintenance and industrial services revenue sitting at a record $1.32bn and engineering construction revenue 31.5% higher at $712.7m.

Underpinning a 33cps final dividend (58c for the full year, marking an 18.4% lift YoY and 91% payout ratio), it’s a positive end to a year that threatened to turn sour after the end date when Albemarle ditched construction on two trains at the Kemerton lithium plant.

MND MD Zoran Bebic, whose firm ended the year on a cash balance of $225.9m, said long-term resources and energy demand “remain robust” despite volatility across the commodities complex.

“Prospects remain positive in resources and energy, with Australian iron ore miners anticipated to continue investing, several new gas construction projects progressing, decarbonisation projects making up an increasing share of capital expenditure forecasts and the pipeline of renewal energy opportunities expanding,” he said.

At the other end of the spectrum, Mader fell just over 11% despite posting a 27% lift in revenue to $774.5m and 31% rise in NPAT to $50.4m, with EBITDA up 32% to $99.2m, paying a 4c final dividend to lift full year payouts 34% to 7.8c.

Revenue is expected to be $870m in FY25 with NPAT of ‘at least’ $57m flagged. However, those results fell well short of consensus estimates from brokers, who predicted FY25 NPAT would lift as high as $64.5m.

Mader supplies technical staff for heavy equipment maintenance at industrial projects, largely in Australia and North America.

 

SRG grows with Diona acquisition

SRG Global (ASX:SRG) was higher after announcing the purchase of Diona in a $111 million deal backed by a $66m cap raising.

$60m of that will come in the form of a fully underwritten insto placement, with a $6m share purchase plan and $50m drawn from a NAB and CBA loan also supporting the purchase.

Diona pulled in $216m of revenue and $19.5m in EBITDA in FY24, working on water supply, sewerage and pipeline maintenance in Australia.

SRG shifted from a net debt position of $17m in FY23 to $17.8m net cash at the end of 2024, boosting its work in hand by 50% to $3bn with the Diona deal.

Revenues were up 32% to $1.07bn in FY24, with underlying EBITDA 23% higher at $98.5m, NPAT(A) up from $31.8m to $40.3m and dividends up 25% to 2.5cps for the second half. Full year payouts lifted 13% to 4.5c.

SRG says including Diona it will rake in $125m in EBITDA in FY25.

Perenti (ASX:PRN) shares fell just under 3%, despite reporting record underlying EBIT(A) of $314.2m and meeting FY24 guidance. The company, which now comprises three of WA’s iconic mining services businesses in Ausdrill, Barminco and DDH1 Drilling, generated record revenue of $3.342bn, with underlying NPAT(A) of $165.8m, up $34m on FY23, with statutory NPAT of $107.2m a $4.6m improvement on FY23.

A 4c per share dividend took total payouts to 6c, with a new dividend policy promising a targeted payout of 30-40% of underlying EBIT(A) going forward.

Despite the bullishness portended by the dividend policy, free cash flow generation could undershoot this year’s level of $184.5m after capex, with FY25 guidance of “greater than $150m”.

Revenue and EBIT(A) are forecast to be slightly higher at $3.4-3.6bn and $325-345m respectively.

Contract digger Macmahon Group (ASX:MAH) meanwhile lifted revenue 6.6% to $2bn, with underlying EBITDA up 13.9% to a record $351.7m, underlying EBIT(A) also up 20.3% to a record $140.3m and underlying NPAT (A) up 35.9% to $91.9m.

Statutory NPAT was down 7.8% to $53.2m with operating cash flow 1.6% lower at $301m.

Mick Finnegan’s Macmahon made a number of deals during the year including the $104m cash acquisition of Decmil.

Free cash generation more than doubled to $74.5m, reducing net debt from $201.9m to $146.6m at June 30 this year, with a final dividend of 0.6c backing a 40% lift in full year dividends to 1.05c.

FY25 revenue guidance has been set at $2.4-2.5bn, with underlying EBIT(A) expected of $160-175m. MAH shares were up 7.6% at 3.30pm AEDT.

 

Elsewhere on the market

The materials sector came to life on Tuesday, up 0.92% with South32 (ASX:S32) and Fortescue (ASX:FMG) among the star large caps.

That was tempered by the energy sector, which came in flat largely thanks to a 14.5% slide for Yancoal Australia (ASX:YAL), which frustrated investors by dumping its dividend to conserve cash for M&A.

Up almost 5% however was Regis Resources (ASX:RRL), which saw a new phase begin in its saga over the scuttled McPhillamys gold mine.

Enviro Minister Tanya Plibersek went on ABC radio to explain her decision to cancel a tailings dam for the $1bn development near Blayney in New South Wales, which came after a Federal Aboriginal heritage protection application over its location in the Belubula River headwaters was partially upheld by Plibersek today.

Among her comments combated by Regis was that the incident showed miners had to engage with traditional owners earlier in their mine development process.

Regis maintains it has engaged with the main traditional owner group which has opposed the mine, the Wiradyuri Traditional Owners Central West Aboriginal Corporation, since it registered for consultation on September 28, 2017.

Wiradyuri elder and local artist Nyree Reynolds, who made the section 10 application under the Aboriginal and Torres Strait Island Heritage Protection Act 1984, was consulted as part of a wider group in late 2016 and then as an individual from late 2020, RRL maintains. The application was lodged in 2021.

Despite Federal and State planning approvals already having been issued for the mine, Albanese Labor Government Environment Minister Plibersek said the ruling was not unusual, saying previous Coalition Government’s Enviro Minister Sussan Ley had made a similar ruling on a karting track at the Mt Panorama site in Bathurst.

 

Making gains 🚀

Monadelphous Group (ASX:MND) (mining services) +10.8%

Macmahon Group (ASX:MAH)  (mining services) +6.9%

Regis Resources (ASX:RRL)  (gold) +5%

Alcoa Corporation (ASX:AAI) (alumina) +4.7%

 

Eating losses 😭

Yancoal Australia (ASX:YAL) (coal) -14.5%

Mader Group (ASX:MAD) (mining services) -11.1%

WA1 Resources (ASX:WA1) (niobium) -3.5%

Bellevue Gold (ASX:BGL)  (gold) -3.1%

 

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.