Duratec flying high on tech-driven asset management

Staff reporter

Company investing heavily in specialised tech and skills

Listed Australian asset management services firm, Duratec, says it remains on track to deliver strong revenue and earnings growth in FY24 after reporting record half-year revenue of A$292 million and net profit after tax that was up 56% year-on-year at $12.2 million.

EBITDA also climbed 52% yoy to $23.74m in the half. The company declared a 1.5c-per-share interim dividend.

Duratec said it was “well positioned” to meet guided revenue ($570-610m) and EBITDA ($45-52m) targets for the year to June 30. It would aim to capitalise on accelerated domestic defence spending in key regions, and growing demand for its services in the key mining and industrial, and buildings and facades markets, after both delivered record revenue in H1 FY24.

Mining and industrial was up 161% yoy to $84 million, making it Duratec’s second biggest division behind defence ($124m in H1 FY24 versus $112m in FY23).

The company turned over circa-$492 million last year and $310m in FY22, underlining its rapid organic and inorganic expansion in the past few years. EBITDA has meanwhile climbed from $19.3m in FY22 and $38.8m last year to current elevated levels.

Despite recent weakness, Duratec’s share price is up about 80% in the past 12 months and its current market value is about $325m.

The company sees tremendous growth prospects in its core markets for the application of its technologies and specialised skills. In particular, management believes Duratec is scratching the surface of $34.7 billion mining and industrial, $17b defence and $11b buildings and facades markets.

Its order book stands at about $400m and it has $1 billion of tenders active in a pipeline estimated at more than $3.7 billion.

“Appetite from clients and sectors relates to understanding the condition of infrastructure assets and obtaining appreciation of future operational expenditure,” managing director Chris Oates said in Duratec’s 2023 annual report.

“To meet this demand, Duratec has invested in technology to capture and report data in a more efficient and reliable manner.”

Growth in a 2017 acquisition, MEnD Consulting, is emblematic of the confluence of Duratec’s assembled capabilities, market needs and techno-economic disruption working in the company’s favour.

MEnD picked up a 2023 Asset Management Innovation Award from Australia’s Asset Management Council for “setting a new standard for the procurement and scoping of major marine asset remediation projects”.

In the second half of FY23 Duratec said it saw a significant increase in the award of structural integrity (SI) upgrades of iron ore industry infrastructure in Australia, starting with BHP Berth C&D wharf at Port Hedland in Western Australia. The $48m contract followed early contractor involvement (ECI) 3D modelling of the wharf, including identification and annotation of defects. It said further SI upgrade work followed at inland Pilbara mine sites.

The BHP ECI project featured a 2-5mm 3D reality model for 1.2km of wharf structure. MEnD devised online software for defect management and worked closely with BHP on inspection, testing and design processes and came up with a robust procurement framework for the asset’s life extension.

MEnD recently finished its largest ever reality model of a 2.7km Rio Tinto export wharf at Cape Lambert in the Pilbara. The model was built on more than one million images.

Duratec says drone capture of high-resolution images can be combined with precise survey, laser scanning and thermal imaging data to accurately reconstruct a client’s asset as a 3D model.

MEnD’s Annoview software adds defect labelling, descriptions, dimensioning and reference to drawings and specifications.

“Coupling this offering with in-house sampling and destructive laboratory testing provides reliable analysis of structure condition assessment,” Duratec says.

“[MEnD] laboratory services are seeing an increasing demand for specialised materials characterization services, including XRD, XRF and SEM.

“Data processing has improved as to our ability to deliver our models onto our clients existing digital platforms.

“Opportunities to leverage computer vision, underwater reality modelling and the automation of current workflows present significant future value.”

Duratec says MEnD is providing reality modelling services for government, marine, mining and industrial asset owners.

“The inhouse capability offers us more avenues to work for key clients throughout the asset life cycle.”


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