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MND - Monadelphous Group

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Treasurer Josh Frydenberg told a press conference yesterday the mining sector was the one bright spot in the latest economic statement.

Mining investment is forecast by Treasury to grow by 4 per cent in the 2020 financial year – the first sign of growth in seven years. The 2021 financial year growth is forecast to be even stronger at 9.5 per cent.

"Industry consultation and recent capital expenditure data suggest that investment in large iron ore projects is expected to continue in order to sustain productive capacity and maintain large capital stocks accumulated over the investment boom," Treasury said.
 
@Dona Ferentes - thanks for the posting. I tried to find a correlation or exclusivity of the announcement with Monadelphous. Is it because Monos are working on iron ore ? But so are others. Sorry - may be you give more info on this. DNH MND
 
nasty

MEA had been performing maintenance shutdown services prior to the fire commencing [Jan 2019], and Rio Tinto has alleged that MEA was in breach of the maintenance contract, thereby causing the fire. Although the writ does not specify any damages, Rio Tinto has separately informed MEA that its claim is for AUD493m in loss and damage. This amount comprises AUD35m in material damage costs associated with the re-construction of the Sinter Fines processing facility, and AUD458m for a temporary operating solution and business interruption losses arising from the alleged inability to process iron ore during the period of reconstruction of the facility.

- lawyers field day
 
Truly so - specially under such situation - bad breadth spreads fast among mining community
 
End of the day MND dived down by more than 10 pc . almost lowest in last 12 months.
1.1 million shares changed hands. The volume is almost three times more than the previous day and one of the highest volume. Would Tuesday be any better - legal case is just the beginning.
I feel bad for the organisation having known them since 1994 or so being a miner in Kalgoorlie region at that time.
They used to have good crafts but many have retired. Many of the existing personnel are frustrated and looking for exit. Good policies on paper but poor execution. Many staff are very green. HR is useless to differentiate chaff from wheat.
Not holding. Had a wish but would wait on the sideline . Would like to hear from others too, should I be seeing too much on this.
 
AGM time

"While the economic outlook in the wake of COVID-19 remains uncertain, the resources sector is expected to provide a steady inflow of opportunities over (the) coming years,” Rob Velletri said.

“… In the longer term, demand for maintenance services is expected to grow on the back of aging assets and customers deferring non-essential work in prior periods.

“… The short to medium-term financial performance of the business will be dependent on the extent and duration of the impact to the company’s operational activity and productivity levels resulting from the spread of COVID-19.”
 
MND won an appeal on a $7million R&D tax ruling from 2015-16
 
Performance Highlights
  • Revenue $947.8 million, up 19% on 2H20 and 11% on pcp
  • Net profit after tax $31.6 million
  • Interim dividend 24cps, fully franked
  • Secured $360 million of new contracts and extensions
  • High level of activity in iron ore sector
  • Substantial improvement in safety performance
  • Strategic focus on people initiatives in tightening labour market

"While the global economic outlook in the wake of COVID19 remains uncertain, the resources sector is expected to provide a steady flow of opportunities for Monadelphous over coming years,"
Click to expand...
 
Rio Tinto had filed a Writ of Summons against one of Monadelphous’ wholly owned subsidiaries in respect of a fire incident which occurred at Rio Tinto's iron ore processing facility at Cape Lambert, Western Australia, in January 2019.

Monadelphous is pleased to announce that a confidential out-of-court settlement has now been reached in this matter, with the settlement being covered by the proceeds of insurance. The parties consider the matter has now been concluded.
Monadelphous highly values its long-term business relationship with Rio Tinto, is pleased that this matter has been resolved amicably, and is looking forward to continuing to work closely with this very important customer into the future.
Click to expand...

-good to hear. One uncertainty removed
 
Performance Highlights
  • Revenue $1.95 billion, an 18 per cent increase on pcp
  • Unprecedented shortfall of available skilled resources experienced
  • Net profit after tax $47.1 million, up 29 per cent
  • Secured $950 million of new contracts and extensions 39 per cent improvement in safety performance
  • Skills labour shortage to continue to be major challenge
  • final dividend of 21 cents per share, taking the full year dividend to 45 cents per share fully franked. This equates to a payout ratio of approximately 90 per cent of reported net profit after tax.

Wow, 2 out 6 Highlights are about shortages
 
Dona Ferentes said:
Performance Highlights
  • Unprecedented shortfall of available skilled resources experienced
  • Skills labour shortage to continue to be major challenge
Wow, 2 out 6 Highlights are about shortages
Click to expand...
and while the payout ratio is about normal, there is not much wriggle room. And if the capacity is limited, and there is pressure on margins, then earnings could be squeezed, no matter how much cherry-picking of select projects


I sold a parcel of MND just prior to 30 June for $10.10 then thought I had been silly to let tax considerations drive things as the SP clambered 15% higher . Now down with a thud, to about that exit point.
 
With labour shortage going to be short lived but iron ore price slump will start the process of lower capex , lesser maintenance and construction works on brownfield as well.
 
Miner said:
With labour shortage going to be short lived but iron ore price slump will start the process of lower capex , lesser maintenance and construction works on brownfield as well.
Click to expand...
i disagree , labour will remain restricted forcing more automation and mechanization ( which SOUNDS great until you try to reduce costs during the slumps , and the financiers still demand you keep up the lease payments )

now there SHOULD be an increase in mining expenditure ( a genuine boom ) coming in the next two or three years , so be careful

the resources cycle is severely out of kilter , add in the mania for EV minerals and things could go seriously wrong ( or right )

take care

i hold several rivals to MND

but MND around $9 MIGHT tempt me to dabble here as well
 
Slightly more than a month from your posting - looks like your temptation to grab MND is coming to fruition

 
** Slightly more than a month from your posting - looks like your temptation to grab MND is coming to fruition **

i weakened and bought a few MND @ $9.75 not long after that and currently have a second order for more @ $8.75

sometimes it is only the share price that deters me from buying a good company

since i am looking ahead for 3 or more years i can be patient if i desire
 
You truly endorse that "patience is a virtue"
 
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