The Monadelphous Group Limited (ASX: MND) share price is up 2.34% today at $18.37, after the engineering company updated the market with results from the first half of FY 2018.
Monadelphous won $385 million worth of new contracts, increasing the workload for both its construction and maintenance divisions and securing $874.1 million in revenue, 38.6% up from the previous corresponding period.
While the business remains centred on the Australian energy and resources markets, the group is broadening its revenue base with a diversification strategy aimed at expanding into the infrastructure sector and overseas markets.
To this end, Monadelphous obtained contracts in the Pukaki irrigation project in New Zealand and in the Oyu Tolgoi mining project in Mongolia. The downside of diversification was a decline in margins, with the NPAT margin down to 4.3% from 4.5% last year despite a 31.6% growth in net profit.
Although revenue growth is unlikely to remain as strong as in the first-half year, the company expects the volume of maintenance orders to remain high and the mining sector to provide major construction opportunities, driving the full year revenue up 30% from FY 2017.
Monadelphous increased its interim dividend 25% to 30 cents per share fully franked.
