Accelerated by the tree-change seeking Victorians that have shifted away from metropolitan Melbourne, massive infrastructure upgrades are underway across regional Victoria with construction company Decmil (ASX: DCG) securing their second big contract within a few months.
The contract awarded by Major Road Projects Victoria (MRPV) is valued at $88.7 million to Decmil which will immediately commence roadworks in the Barwon Heads district in the Western Region of Victoria.
“Securing this significant contract is further validation of our strategy to target the burgeoning government spend on infrastructure projects,” said Decmil CEO, Dickie Dique.
“Our relationship with the Victorian Government continues to go from strength to strength, which is a testament to our ability to successfully deliver major projects.
“This is particularly evident in the Geelong region, where the Barwon Heads project is located, as over the past 5 years we have successfully completed numerous projects, most notably the Drysdale Bypass and Princess Highway Section 3.”
Alongside upgrades to existing roads in the district, Decmil will also be responsible for constructing a new four-lane bridge over Waurn Ponds Creek. The Company cites their focus on works around sensitive wetlands as one reason they continue to win major infrastructure contracts.
The Western side of regional Victoria continues to thrive with the districts of Geelong and Wyndham (Wyndham Vale, Werribee & Hoppers Crossing) undergoing major population growth which is projected to increase further in the coming years.
For the year ended 30 June 2021, Decmil reported total revenue of $303.7m which was a 32% decrease on the previous year’s $451.3m. Pandemic lockdowns impacted the Company throughout the year but they have also been undergoing an operational restructure to retire legacy business units that have impeded Decmil’s growth.
With the restructure, FY21 net loss after tax improved substantially to $11.4m after reporting a net loss of $140m the previous year.
The $88.7m contract win from MRPV was the second big Government infrastructure project awarded to Decmil in 2021 having in March secured works with Rail Projects Victoria to upgrade the Gippsland rail line, a deal valued at $140m.
Alfred Chan is a Business Reporter at The Sentiment specialising in ASX-listed small cap companies, a bloodstock enthusiast and former equities analyst.
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