Synertec reports a strong Q1 update across key metrics as it achieves several key milestones, focuses on ESG and wins major contracts.

Diversified technology and engineering firm Synertec (ASX:SOP) has recorded a strong start to the financial year as it focuses on improving operational efficiency and reducing its environmental footprint.

Revenue for Q1FY22 of $2.6m was up 44% on the previous corresponding period (pcp), with net cash at 30 September of $8m.

Synertec’s focus throughout Q1 was progressing its three environmentally friendly technology solutions to help the global energy industry reduce its environmental footprint.


Launch of Powerhouse Project

In August Synertec announced the launch of its Powerhouse Project, which centres around the design, construction, and field testing of renewable energy systems for the purpose of “remote-site application to CSG well dewatering”.

Powered by solar energy and batteries, the systems deploy Artificial Intelligence and predictive analytics to “optimise energy efficiency and power delivery”.

Synertec has entered a Memorandum of Understanding (MOU) with oil and gas major Santos to progress the Powerhouse technology.

Under the MOU Synertec will design, construct and field test a prototype solar energy power system to optimise the generation and consumption of renewable electricity.

The power system is being designed to meet the energy requirements for sustainable well de-watering at Santos’ Myalla coal-seam-gas development in Roma, Queensland.

In its Q1 update Synertec advised it had completed procurement of all key long lead-time items including solar panels, batteries, the mounting system, and unique battery houses.

It forecasts significant opportunities for the technology across the energy and resources industries with continual future development.


Positive ESG outlook

The company is also developing the Composite Dry Powder (CDP) technology toward its promise of an environmentally friendly and economically scalable treatment of oil and gas drilling mud and cuttings.

In July, Synertec’s global partner in the development of its marine Custody Transfer System (CTS) signed a Heads of Agreement with Venice Energy to negotiate the charter of an LNG Floating storage and Regasification Unit (FSRU) for the Outer Harbour LNG import project in Port Adelaide.

Synertec announced that DNV certification has successfully progressed with formal notification expected in coming weeks.

The certification is considered a significant milestone in development of the CTS technology and its application to both marine and land-based installations.

Synertec is further building its Environmental, Social and Governance (ESG) credentials. The company has committed to making ESG disclosures against the universal World Economic Forum (WEF) Stakeholder Capitalism framework.

According to Synertec the initiative will align the company’s mainstream reporting on performance against ESG indicators and ensure it diligently considers all pertinent risks and opportunities in its business operations.


Core engineering and Melbourne Metro Tunnel Project drive further growth

The increased pace of critical infrastructure planning and expenditure has seen Synertec’s engineering and technology businesses continue to win new business in Q1. The company’s team of engineers have been engaged to work on projects from critical infrastructure to pharmaceutical manufacturing, including vaccine facilities.

Synertec is also working on a $3m project with Metro Trains Melbourne (MTM) to deliver the control and monitoring system for the Metro Tunnel Project (MTP). The $11b MTP is one of Victoria’s largest infrastructure projects with the control and monitoring system a cornerstone to ensuring its safe and reliable operation.


Laying the groundwork for future revenue

Synertec managing director Michael Carroll said Q1 had been a period of significant success with a several milestones achieved, and contracts awarded.

Mr. Carroll said as companies it works with look to improve operational efficiency and reduce their environmental footprint Synertec’s technology and team of engineers can significantly drive revenue growth.

“Our technology business continues to advance our Powerhouse Project, which shows great promise to reduce carbon emissions whilst increasing the reliability of gas gathering operations,” he said.

“On this front we are closely working with Santos to develop and prove the technology and we see significant scale benefits of the technology across Australia and indeed globally.”

Mr. Carroll said the award of the contract with Metro Trains Melbourne reflected the scale and quality of projects Synertec was working on.

“The strategic combination of environmental technology development and highly skilled engineering capabilities is only just starting to deliver on our potential for significant revenue growth over the short and medium terms,” he said.

This article was developed in collaboration with Synertec, a Stockhead advertiser at the time of publishing.

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