Engineering and construction firm Duratec (ASX: DUR) has secured $76.5 million worth of significant contracts from the energy and defence sectors which includes their first direct contract with energy giant Woodside Energy (ASX: WDS) and their largest contract to date with the Australian Department of Defence.
The first of the contracts is valued at $21.8 million for the refurbishment of the King Bay Supply Base (KBSB) Wharf located at the Port of Dampier in Western Australia. The project, contracted by Woodside, involves extending the service life and enhancing the safety and operational efficiency of the existing wharf facility. The refurbishment is part of Duratec’s broader business strategy to diversify its portfolio within the energy sector.
Preliminary work for the KBSB project is set to begin in November 2024, with onsite work scheduled to commence in February 2025. The project is expected to be completed by the end of 2025. This contract represents a significant opportunity for Duratec, as it not only reinforces its capabilities within the energy sector but also opens the door for future collaborations with Woodside.
In addition to the energy sector win, Duratec’s 49%-owned associate business, DDR Australia (DDR), has secured a $54.7 million contract with the Department of Defence. This is the largest contract ever awarded to DDR and forms part of the Project Phoenix portfolio, a major initiative in the Northern Territory. The project involves the refurbishment of existing buildings, upgrades to engineering services, construction of a new receive site, and the installation of fibre optic link cables. The work also includes the decommissioning of high-frequency communications infrastructure.
DDR is expected to commence early civil works in October 2024, with the project spanning 30 months. The contract is expected to have a lasting impact on the region, as it will be delivered in collaboration with regional partners, ensuring that local businesses benefit from the contracted works.
Duratec’s Managing Director, Chris Oates, expressed his excitement about the company’s recent successes.
“We are delighted to be working directly with Woodside as we execute Duratec’s wider business strategy to pursue diversification through investment in the energy sector,” he said.
“The DDR award demonstrates that the company continues to be a trusted defence partner.”
The new contracts come at a time of strong financial performance for Duratec, which reported record revenues of $555.8 million for FY24, a 13% increase from the previous year.
The Company’s EBITDA also saw a significant rise of 22.6%, reaching $47.6 million, while NPAT grew to $21.4 million with shareholders rewarded with a 2.5 cent per share fully-franked dividend.
Emily Maxwell is a business writer at The Sentiment with interest in the tech, fintech and retail industries.
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