MND - Monadelphous Group

finicky said:

All the guys discreetly* bragging about their entry levels are the ones who didn't join in on the Cup Sweep @Dona Ferentes @galumay @divs4ever *

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and how are you going in the Nov comp?

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Dona Ferentes said:

and how are you going in the Nov comp?

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Rigged

Dona Ferentes said:

and how are you going in the Nov comp?

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me ? neither hero or zero whoops , actually back to zero

ummm neither stellar nor cellar-dweller

MND has secured new construction and maintenance contracts in the resources, energy and infrastructure sectors totalling approximately $215 million.

... lithium, gas, coal, big battery jobs.
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and trading close to recent highs.

Half Yearly out.

25c dividend



with ructions in several sectors (nickel, lithium come to mind), the spread of work, both new and maintenance, holds MND and other contractors in good stead.
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MARKETS AND OUTLOOK
Longer-term demand forecasts remain strong across most commodity markets, with global economic uncertainty moderating more recently. The resources and energy sectors are providing a significant pipeline of prospects across a broad range of commodities, with expenditure related to decarbonisation representing an increasingly larger proportion of investment activity. Production across most commodities is forecast to remain around the current high levels, supporting continued sustaining capital and maintenance spend. Some price volatility in specific commodities may lead to a decrease in production or deferral of capital investments, as clients focus on reducing costs.

Notwithstanding this, levels of mining and mineral processing development in the energy transition metals sector are forecast to remain high over the longer-term, and investment to sustain iron ore production levels will continue over coming years.

In the energy sector, there are several new gas construction projects currently in the development pipeline and demand remains strong for maintenance services, with decommissioning prospects expected to grow over coming years. The hydrogen market continues to evolve and is expected to provide more significant opportunities
through the second half of this decade.

Sustained levels of maintenance activity in the resources sector are forecast as production remains high and recent mining developments and expansions move into the operating phase.

Accelerating decarbonisation efforts in Australia’s power sector are driving an expanding pipeline of renewable energy opportunities, including a large number of new wind farms and battery energy storage projects. Planning approvals and network constraints have impacted investment decisions over the past year. However, Zenviron remains well placed to capitalise on the significant growth expected in this sector over coming years.

As the shortage of skilled labour in Australia remains a challenge, Monadelphous continues to focus on employee attraction, training, and development initiatives to support retention.

Following a solid first half and the momentum generated by construction awards in the period, full year revenue for FY24 is expected to see an increase of around 10 per cent on the previous year.

With labour and supply chain capacity constrained, the Company will continue to leverage its strong position and take a strategic and targeted approach to new work, engaging and collaborating early with its customers, focusing on earnings quality and maintaining an appropriate approach to the allocation of risk.

Looking through ASX stocks above $12 and with a daily turnover > $3M. Got down to WDS and WOR and of course MND pops into my head and I notice that it's not on the list. (?) It turns out that the daily turnover for MND is currently less than $3M.

I haven't seen the MND chart for quite some time so I thought I'd post up my thoughts on it here.
I view both the weekly and daily charts on the one screen. I used to look at one timeframe at a time switching back and forth but after a while I realised that I was only looking at the daily charts and not the weeklies. I was missing out on the larger context. A short term trader can get away with this in bullish and bearish market conditions but when the market becomes volatile and choppy the short term trader gets the "death by a thousand cuts" treatment. The market is ruthless if you're not in sync with it.



MND weekly chart (on the left).

I look for the last impulsive swing first. This happens to be the swing up starting in mid 2023. This is notable because it shows that MND was much in demand in this period and was very strong relative to the XAO. You can see this in the upper pane which shows the relative strength indicator. While it's green MND is acting stronger than the XAO.

This changed in Nov 23. At this time the XAO rallied strongly and has continued to go higher (even now May24). MND did not participate in this market rally. There wasn't enough demand for MND during this period. There still isn't so price is falling lower.

In charting parlance the price action of MND changed from an impulsive swing up to a corrective swing down. We anticipate this corrective swing down once the impulsive swing up ended. The market alternates from impulsive to corrective in all timeframes. Believing this then the next swing for MND should be another impulsive swing up. The problem is that we don't know when this will start.

Currently price has fallen to the 50-62% PB buy zone on the weekly chart. For me this is a significant level (zone). If demand is strong this zone is where I'd expect to see it provide some support for the share price. Once price gets below the zone I start to have doubts about the strength of the demand. I prefer to buy stocks in demand not stocks out of demand.

I consider the chart to be overall bullish (making a higher weekly low) but understand right now it's corrective, bearish and relatively weak.

Daily chart (right): Short description. It's a volatile mess. Very choppy, crappy price action. Wouldn't trade this for quids.

Trading opportunity: None yet. I'd prefer to see some demand kick in to form a high volume weekly bar. Then I'd be interested.
Not worth my time monitoring this chart yet.

MONADELPHOUS CONTRACTS UPDATE

Engineering company Monadelphous Group Limited (ASX: MND) (“Monadelphous” or “the Company”) today announced it has secured new construction and maintenance contracts in the resources sector totalling approximately $120 million. In Papua New Guinea, the Company has been awarded a three-year contract to continue providing sustaining capital projects and maintenance support activities at Newmont’s gold operations at Lihir Island, where Monadelphous has been providing services since 2017.

Monadelphous has also secured two contracts with Rio Tinto in the Pilbara region of Western Australia, firstly, for the provision of shutdown and miscellaneous works at the Western Range Project, as well as for the construction of a potable water distribution system at the Hope Downs 4 mine.

Finally, the Company has secured a three-year contract to continue providing rope access and associated services for Dalrymple Bay Coal Terminal in Hay Point, Queensland.

i hold MND

sits well for continuity.
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MND has been awarded a major long-term maintenance and minor construction services contract associated with Shell Australia Pty Ltd’s Prelude Floating Liquefied Natural Gas facility. The seven year contract will commence in November 2024 at the expiry of the Company’s existing contract with Shell.

Under the contract Monadelphous will continue providing onshore project management and planning services at Shell’s head office in Perth, Western Australia, and offshore maintenance services atPrelude FLNG, located in the Browse Basin, approximately 475 kilometres north-northeast of Broome, WA.

collateral damage

.Down from $13.00 to $11.95, prior to the announcement . Now $12.22 .... a hard one to hide, and probably not the last disruption or contract retraction ?
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MND has been notified by Albemarle this morning that the Company’s contracts at Albemarle’s Kemerton Project in the south-west region of Western Australia have been terminated for convenience by Albemarle. The termination follows Albemarle’s recent announcement regarding a comprehensive review of its asset and cost structure.

The Company’s forecasts estimate that the aggregate revenue expected to be delivered from all works to be performed for Albemarle at the Kemerton Project for the year ended 30 June 2025 would be in the range of $75m - $85m.

Monadelphous was contracted to construct the front-end pyromet works associated with two new lithium processing trains and a multidisciplinary package for the utilities and reagents scope. The Company has been formally notified that the termination of the construction contracts will take effect on and from 12 September 2024.

The Company estimates that its contracted construction works are currently 15% - 20% complete. The termination of these contracts reduces the Company’s current construction work-in-hand by approximately $200m.

Dona Ferentes said:

collateral damage

.Down from $13.00 to $12.01 prior to the announcement .... a hard one to hide, and probably not the last?
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MND has been notified by Albemarle this morning that the Company’s contracts at Albemarle’s Kemerton Project in the south-west region of Western Australia have been terminated for convenience by Albemarle. The termination follows Albemarle’s recent announcement regarding a comprehensive review of its asset and cost structure.

The Company’s forecasts estimate that the aggregate revenue expected to be delivered from all works to be performed for Albemarle at the Kemerton Project for the year ended 30 June 2025 would be in the range of $75m - $85m.

Monadelphous was contracted to construct the front-end pyromet works associated with two new lithium processing trains and a multidisciplinary package for the utilities and reagents scope. The Company has been formally notified that the termination of the construction contracts will take effect on and from 12 September 2024.

The Company estimates that its contracted construction works are currently 15% - 20% complete. The termination of these contracts reduces the Company’s current construction work-in-hand by approximately $200m.

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needs to drop another $2.50 plus to tempt me to add more

however my cynicism of the 'great lithium boom' is being strengthened

Dona Ferentes said:

collateral damage

.Down from $13.00 to $11.95, prior to the announcement . Now $12.22 .... a hard one to hide, and probably not the last disruption or contract retraction ?.

MND has been notified by Albemarle this morning

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still around $12 ... ASX had a few questions:

Is MND aware of any information concerning it that has not been announced to the market which, if known by some in the market, could explain the recent trading in its securities?
MND response: No. The Company was notified by Albemarle earlier today (1 August 2024) of the termination of certain contracts relating to Albemarle’s Kemerton Project. The Company became aware at approximately 6.35am (WST) of the termination of the construction contracts (effective 12 September) by receipt of written notice, and was subsequently verbally notified about the termination of the maintenance services and sustaining capital projects contracts at approximately 8.20am (WST). The Company also became aware (at approximately 7.00am (WST) via the West Australian (online)) of media comment attributing statements to Albemarle regarding the status of its Kemerton Project. In response to these matters the Company promptly and without delay took steps to verify the information, to
understand its likely impact on the Company (including, once known, the incremental effect of termination of the maintenance services and sustaining capital projects contracts) and to prepare and release an ASX announcement (headed “Albemarle Contracts Update”) this morning. The ASX announcement was lodged with ASX at approximately the same time as receipt of the ASX price query letter.

Full year results out


Revenue $2.03 billion, up 11% on FY23
• Record full year revenue for Maintenance and Industrial Services – $1.32 billion
• Engineering Construction revenue $712.7 million, up 31.5%

- Secured more than $3.0 billion in new contracts and extensions
- EBITDA margin 6.28%, up from 5.96% pcp
- Net profit after tax up by 16.2% to $62.2 million, EPS 64.1c
- Full year dividend 58cps, dividend payout ratio 91%
- Cash flow from operations $187.7 million; cashflow conversion rate 169%
- Significant pipeline of opportunities in resources and energy sectors

lifted this H dividend to 33c ff.

Monadelphous inks contracts with major miners​

Monadelphous has been awarded multiple new maintenance and mining services contracts with some of Australia’s largest miners.

The engineering company has locked in two one-year contract extensions with Rio Tinto, which are for fixed plant maintenance services and sustaining capital projects across the major’s iron ore operations in the Pilbara region of Western Australia.

At the Tom Price iron ore mine in the Pilbara, Monadelphous has also secured a fabrication, supply, installation and commissioning contract. The works are expected to be completed by mid-2025.

The contracts with Rio Tinto come as the major miner welcomes increased iron ore production and shipments in the first quarter of the 2024–25 financial year.


Elsewhere in WA, Monadelphous has secured a new three-year contract with South32’s Worsley Alumina operation. Worsley Alumina comprises a bauxite mine located near Boddington and an alumina refinery located near Collie.

Under the new contract, Monadelphous will deliver minor project works. The deal follows Monadelphous locking in a maintenance and shutdown services contract extension at Worsley Alumina in September.

Inteforge, Monadelphous’ fabrication business, has secured a contract for the supply and fabrication of structural steelwork and pipe racks at Iluka’s Eneabba rare earths refinery project in WA. The works are expected to be concluded in mid-2025.


Since the 1990s, Iluka has stockpiled monazite produced at its Narngulu mineral separation plant near Eneabba. Iluka commissioned a concentrator plant at Eneabba to further process the stockpiled material and separate the monazite to produce approximately 90 per cent monazite concentrate, which will provide a direct feed to Iluka’s Eneabba rare earths refinery.

In total, the five contracts will generate approximately $160 million in revenue for Monadelphous.

Not Held

AGM today. $12.90

excerpted:

...Price volatility in some commodities over the past year led to reduced production, cessation of some operations, and the deferral of capital spend, particularly in nickel and lithium. Despite this, the level of mining and mineral processing development in the energy transition metals sector is projected to remain high over the long-term. This includes the copper sector, which will require significant capital investment to address forecast demand shortfalls.

Activity in the energy sector has increased with several new gas construction projects underway or in development and strong ongoing demand for maintenance services. Additionally, decommissioning of oil and gas assets is expected to create significant opportunities over the coming decade.

Decarbonisation investments for customer operations, including electrification, energy storage and hydrogen, are proceeding to investment and provide opportunities. Investments in the power sector to support Australia’s Net-Zero Emissions objective have been affected by network constraints, delayed planning approvals and supply chain pressures. Despite these challenges, the pipeline of renewable energy opportunities is expanding, particularly in the battery energy storage sector with Zenviron well positioned to capitalise on the significant growth anticipated in the market over coming years. Additionally, substantial and ongoing investment in electricity transmission infrastructure and grid stability will be essential to support the increased introduction of renewable energy generation.

While forecast labour demand has moderated and general labour availability has improved slightly, the resources and energy sectors continue to face a shortage of skilled labour. We remain focused on employee attraction, training, and development initiatives aimed at fostering retention and bolstering workforce capability and capacity.

With a robust level of major construction activity underway, we have secured around $740 million of new projects, bringing the total of contract awards post year end to more than $1.5 billion.

Monadelphous is currently forecasting revenue for the first half of FY25 to be slightly up on the prior corresponding period. With activity levels increasing, the Company is anticipating to see high single digit revenue growth for the full financial year.

pleasant positive direction .. hasn't been in $14 range for a while

Dona Ferentes said:

pleasant positive direction .. hasn't been in $14 range for a while

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Monadelphous cut to Neutral; $14.80 target: Macquarie

Kind regards
rcw1

rcw1 said:

Monadelphous cut to Neutral; $14.80 target: Macquarie

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been a good few months. ... I'd expect the buying to slacken off.

Dona Ferentes said:

been a good few months. ... I'd expect the buying to slacken off.
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Good morning @Dona Ferentes
Are you holding?

rcw1 not that familiar with this stock.

Kind regards
rcw1

rcw1 said:

Good morning @Dona Ferentes
Are you holding?

rcw1 not that familiar with this stock.

Kind regards
rcw1

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yes, bought in 2005 for $1.12 (adjusted for split). Have sold a few along the way, but as long as they get contracts, and dividends flow, it will sit there as an exposure to Oz mining sector .

$14.21


The Company has secured a multidisciplinary construction contract under its sustaining capital projects panel agreement for a replacement ammonium nitrate storage facility at Rio Tinto’s Brockman 4 mine, located in the Pilbara region of Western Australia. Work under the contract is expected to be completed in the first half of 2026.

Monadelphous has also been awarded a three-year panel contract to provide water management works across Rio Tinto’s mine operations in the Pilbara region of Western Australia.