Contractor Decmil Group has posted a $140 million loss for the 2020 financial year, primarily due to the earlier termination of a major contract with the New Zealand prisons department.
It comes several months after the Osborne Park-based company said it would make provisions to cover unpaid sums of money under a contract with the Department of Corrections, which involved construction of three 126-bed modular prisons.
The $185 million works, known as the Rapid Deployment of Prisons project, was one of Decmil’s largest contracts. Its early termination was followed by the closure of Decmil’s NZ subsidiary in April.
In May, the contractor had also flagged a $29 million write-down of its Homeground Gladstone liquefied natural gas (LNG) accommodation village in Queensland, citing falling oil prices and COVID-19 impacts.
Decmil, as a result, reported a $140 million loss in the 12 months to June 30, compared with a $19 million profit in FY19.
Revenue was also down, falling 18 per cent to $451 million.
Chief executive Dickie Dique, who replaced former CEO Scott Criddle in May, said the results reflected a difficult period.
He said the business had responded by restructuring its operations and implementing better project reporting, among other strategies.
“The restructure has been underpinned by a new executive team, refreshed board, and targeted strategy that is focused on our core engineering, construction and maintenance expertise for the infrastructure, transport, resources and energy sectors across Australia,” Mr Dique said.
He said the company had entered the new financial year with an enhanced liquidity position, on the back of a $52 million capital raising that launched in June.
Decmil reported cash of $44 million at June 30 (down from $83 million in FY19) and an order book of $446 million, which includes work on the state government's $175 million Albany Ring Road and $47 million Reid Highway projects.
The contractor also has a tender pipeline of projects between $7 billion and $8 billion, Mr Dique said.
Meanwhile, Decmil has unresolved disputes with Sunraysia Solar Farm over works in NSW, and with Southern Cross Electrical Engineering, which is pursuing an $11 million claim in relation to a sub-contract for works on a Rio Tinto bauxite mine in Queensland.
Decmil said it expected a favourable outcome on the disputes.
Its shares were up 2 per cent at 12:10pm AEST to trade at 5.2 cents each.
