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New contracts power Delta SBD growth drive

NEW longwall surface build and underground installations at the BHP Billiton Mitsubishi Alliance'...

Lou Caruana
New contracts power Delta SBD growth drive

It jumped 22% to $145.1 million, with its underlying net profit after tax rising 26% to $8 million.

Growth was also delivered through new Rio Tinto’s Kestrel Mine Extension contracts, and longwall relocations at Whitehaven’s Narrabri mine and Glencore’s Blakefield mine in New South Wales.

Delta SBD has positioned itself as a leading contractor for longwall moves in Australia, having now completed over 105 longwall projects in the past 15 years and a record 14 projects in the 2013 financial year.

The company has been appointed as sole agent in Australia and New Zealand for grid mesh manufactured by ADFORS Saint-Gobain.

ADFORS mesh is used in over 60% of longwall salvages in the US and will enhance the company’s ability to increase its longwall services capability, managing director Steve Bizzaca said.

“We delivered a very good financial result in what has become an extremely challenging environment for companies servicing the resources sector,” he said.

“Our record revenue and profitability results were underpinned by new contract awards and our fit-for-purpose equipment fleet. A major highlight for the year was the completion of our 100th longwall move, which is a testament to the longevity and technical proficiency of our company.”

Bizzaca said market conditions were challenging and likely to remain so in FY2014, with pressure continuing on mining companies to lower costs in the face of lower coal prices.

“We do expect that coal prices will improve during FY14, especially from the coking coal producers which are our main clients, but we believe that it is likely that the record revenue result achieved by the group in FY13 will still be impacted,” he said.

“Steps have therefore been implemented to reduce Group costs while maintaining our client ‘value adding’ proposition as attractive and competitive.”

The company’s workbook (excluding non-contractual recurring work) for the next two years remains positive at $124 million, with the FY2014 portion of this workbook at $62 million.

Activity in its tender pipeline is increasing, with $73 million active inquiries and a further $142 million of inquiries expected in the short term, Bizzaca said.

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