NRW weathering contract delays

Major Australian surface mining contractor NRW Holdings has warned against further adverse weather impacts on profits, and longer project tender cycles, while reaffirming a forecast 8-12.5% revenue uplift in its current fiscal year to June 30.

ASX-listed NRW reported a 7.4% year-on-year increase in EBITA to A$80.1 million ($138.3m EBITDA) and 15% yoy rise in revenue to $1.33 billion before repeating its FY23 revenue guidance for $2.6-2.7b ($2.4b in FY22) and EBITA guidance of $162-172m.

It said its order book at the end of 2022 was $4.9b compared with $4b at the same time a year earlier, with $2.6b secured for the current year.

Mining revenue in the first half was 19% higher yoy on at $726m; MET (minerals, energy and technologies), including the Primero, RCR and Diab Engineering businesses, was up 5% yoy at $378m; and Civil, including significant mine development and infrastructure work, was 11% higher yoy at $253m.

NRW said Queensland central coast coal projects saw 77% higher than average rainfall in the six months to the end of December, 2022. South-east Queensland urban projects were also hit by above-average rain.

Seven of NRW’s 13 active mining contracts are eastern Australian coal mines.

NRW said H1 mining EBIT margins were negatively impacted by a La Nina weather pattern, “increased overheads from the delayed commencement of new work, longer tender cycles and investment in building capacity in Primero’s North American delivery capability to support growing client demand in Canada and the USA”.

It had also lost tenders it expected to win due to being undercut on price.

Primero had a circa-US$27m order book of engineering feasibility studies for lithium process plants for “tier-one US clients”.

NRW’s share price was down as much as 14% today before recovering to be down about 6% near the close of trading. Its market capitalisation was c$1.25b.

The price is still up nearly 25% over the past six months.


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