Australian Securities Exchange-listed Duratec’s latest A$44 million master services agreement contract win with mining major Rio Tinto in Western Australia gives it more than $100 million of FY25 new business and set the company up to surpass last year’s record revenue total.
Duratec managing director Chris Oates said the Rio Tinto contract to install strengthening steelwork at a Tom Price mine ore handling facility from early 2025 to late 2026 was a key milestone for the company.
“Duratec has a long history in delivering large asset remediation projects for the mining and industrial sector,” he said.
WA stockbroker Shaw and Partners said the $102 million of recent contract wins with Rio, Woodside Petroleum and Australia’s Department of Defence would likely contribute $50 million of FY25 revenue which with Duratec’s $365m orderbook and $150m of existing master service agreement (MSA) revenue “provides $565m in revenue visibility” for the current year.
Duratec reported FY24 EBITDA of $47.6m and net profit of $21.4m on $555.8m revenue, up from $491.8m the previous year.
“Revenue visibility represents 93% of guided revenue of $610m,” Shaw said in a note.
“MSA revenue has climbed strongly from about $50m in FY21 to about $145m in FY23. The rise in MSA provides an annuity-style baseload of revenue with gross margins above the group average.
“We expect MSA revenue to continue to climb as a proportion of overall revenue to reflect stronger integration with asset owners that reward Duratec’s engineering expertise and access to labour.”
Duratec’s share price is up more than 17% in the past month, capitalising the company at about A$415 million.