A bevy of large contract wins have delivered a financial boost to engineering and construction company EVZ (ASX: EVZ) which has expanded into new regions that are seeing growth thanks to major project works.
Brockman Engineering, a key subsidiary under EVZ, continues to make significant strides with their Viva Energy Strategic Storage project, located adjacent to the Viva Refinery in Corio, Geelong. This project successfully completed the construction of three tank shells and geodesic dome roofs, which now allows the project to progress according to the budget and schedule. The contract value for this project now surpasses $58 million. In addition to this milestone project, Brockman Engineering is actively engaged in delivering large steel water reservoirs for water authorities and liquid fuel tanks.
In the building products sector, Syfon Systems, another subsidiary of EVZ, continues to excel thanks to a high backlog of projects won and are on schedule for delivery, including the Tun Razak Exchange project in Kuala Lumpur. As the demand for their services in large social infrastructure and building developments across Asia continues to rise, the business is progressively returning to full operating capacity. Syfon Systems’ strategic partnership with Rucika in the Indonesian market further fuels their growth in the region.
Profitable growth is also underway at Tank Industries, another subsidiary since its acquisition, the business has consistently operated profitably and is on track to recoup the acquisition expense within the first half of the current financial year.
The impending co-location of Tank Industries and Syfon Systems in Melbourne’s southeast suburbs is expected to maximise market penetration and operational performance. The company is also actively researching and developing its tank products to make them more appealing to a broader client base.
TSF Power, a technical service and power generation parts provider, is also experiencing sustained growth and aligns with the market’s transition towards a lower carbon future, with the increased use of renewable gas as an energy source. TSF Power’s technical support and value-added offerings are in high demand across its operating segments. The company is actively pursuing long-term parts sale agreements and operations support contracts with large institutional and waste management entities in Australia and New Zealand.
In terms of financial stability, EVZ reported an operating net cash outflow of $0.35 million for the first quarter, primarily due to project prepayments to suppliers. Nonetheless, the company maintains a healthy cash reserve of $8.7 million and has zero drawn debt. EVZ is actively pursuing operational improvements aimed at enhancing profit margins and reducing commercial risk, with expectations of visible improvements in the second half of the financial year.
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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