The Monadelphous Group Limited (ASX: MND) share price is falling lower this afternoon after the company’s annual general meeting (AGM) update.
Why is the AGM update moving Monadelphous shares?
Chairman John Rubino highlighted the company’s record annual revenue from its Maintenance and Industrial Services division for the second year in a row. Higher activity levels in iron ore, as well as oil and gas, were big tailwinds for the group.
Monadelphous recorded revenue of $1.6 billion in FY 2019 and a net profit after tax of $57.4 million.
The company’s Engineering Construction division had lower activity levels last year in the resources construction sector. However, Monadelphous has secured several big contracts recently with the likes of Rio Tinto Ltd (ASX: RIO) and BHP Group Ltd (ASX: BHP).
Despite this, the Monadelphous share price is falling lower today as the company citing challenges for margins heading forward.
Revenues for the 1H 2020 are expected to climb higher versus 2H 2019, but flat on the previous year. Managing Director Rob Velletri noted market competition and price sensitivity as key concerns in the year ahead.
Monadelphous remains in “good shape” according to Mr. Velletri, despite a number of construction opportunities advancing to execution later than expected.
Talent acquisition and retention remains a key focus as the labour market tightens and competition increases.
What else has Monadelphous announced recently?
The Aussie engineering group recently acquired two Chilean businesses as it expands into the lucrative South American market.
The $9.5 million acquisition gives Monadelphous a foothold in Chile as it looks to extract value for shareholders.
The Monadelphous share price climbed higher after purchasing a 75% stake in Buildtek on 14 November.
Mr. Velletri noted that innovation and continuous improvement remain central to the company’s long-term value.
Despite a number of successes in FY 2019, the Monadelphous share price has fallen 1.11% lower in today’s trade after its AGM update.
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Motley Fool contributor Kenneth Hall has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.