DRA Global has recorded a 116% year-on-year increase in net profit to A$50 million on a strong revenue rebound to $1186m in its first year as an ASX-listed company, with CEO Andrew Naude saying the company “achieved what we set out to do for the year” despite COVID headwinds.
Naude said the record revenue level for the year to the end of December 2021 was achieved on the back of a 44% yoy rise in APAC/Americas region revenue to $579m, “demonstrating increasing traction” outside the former South African-based company’s traditional EMEA stronghold. DRA relocated its headquarters to Australia ahead of its July 2021 ASX and Johannesburg listings.
Its annual revenue dipped from $1033m in FY19 to $938.2m in FY20 before this year’s bounce.
The engineering, construction and operations management services provider did maintain stronger FY21 margin performance in its longer-established markets, with EMEA region EBIT up by 86% yoy while now discontinued fixed-price contracts in APAC meant the top-line growth was “not converted to earnings” in FY2021. The contracts had been hit by COVID-19 related disruptions, labour shortages and logistics challenges.
DRA’s overall EBITDA margin was 5.2% in FY21 on $62.1m of EBITDA, compared with 6.3% ($58.9m) in FY20.
The company’s $790m backlog of secured work is made up of mining, mineral processing and infrastructure asset operations and maintenance contracts (62%), and projects (38%), with 81% of the latter in EMEA. More than 60% of the $1100m of new contracts and renewals secured in 2021 is also in EMEA.
Naude said in DRA’s 2021 annual report the company was able to “build on the groundwork achieved the previous year” in the Americas region with “Peru, in particular, [having] a great year in FY2021”. DRA opened an office in Santiago, Chile, in 2021 and had about 90 employees in South America at the end of the year. “The outlook for growth in the Americas is positive with many of our advisory studies now moving to the next phase of project design and execution,” Naude said.
In the APAC region, “we centred our efforts on acquiring talent, building our subject matter expertise, formalising our processes and systems, improving project delivery, and linking our technical capabilities with our team in EMEA”.
“This consolidation both stabilises our capability and sets us up for growth in FY2022,” Naude said.
The company also sees that it has made progress in underground mine design and development, which is among its core strategic growth focus areas. Naude said a large portion of project-related FY21 revenue in EMEA was attributable to mining projects and “we secured our first underground mining operations contract for Palabora Copper in South Africa … the region’s first material underground mining operations contract”.
“With a continuing trajectory of more mines moving to underground in the decades ahead, DRA has deep expertise in the mine planning, feasibility, engineering design and delivery of underground mines,” he said.
DRA finished 2021 with net cash of $118.4m on its balance sheet.
Its ASX share price (DRA) is down 25% since listing, capitalising the company at about $162m.