Labour Shortages and Contract Risks Shadow Monadelphous’ Strong H1 Results
Monadelphous delivered a robust first half in 2025, posting a 4.2% revenue increase to $1.051 billion and a 41.3% jump in net profit after tax, underpinned by strong contract wins and operational momentum.
- Revenue rose 4.2% to $1.051 billion in H1 2025
- Net profit after tax surged 41.3% to $42.5 million
- Secured $1.7 billion in new contracts across sectors
- Strong demand in maintenance services and engineering construction
- Cash balance increased to $272.5 million with 145% cash flow conversion
Robust Financial Performance
Monadelphous Group Limited has reported a solid first half for fiscal year 2025, with revenue climbing 4.2% to $1.051 billion and net profit after tax (NPAT) soaring 41.3% to $42.5 million. Earnings per share rose 43.3% to 43.3 cents, reflecting improved operational efficiency and a favorable mix of non-operating items including insurance proceeds and foreign exchange gains.
The company’s cash position remains strong, with $272.5 million on hand and a cash flow conversion rate of 145%, underscoring effective working capital management amid ongoing project execution.
Contract Wins Drive Growth
Monadelphous secured $1.7 billion in new contracts and extensions during the half, spanning engineering construction and maintenance & industrial services divisions. This contract pipeline includes major projects in energy, iron ore, energy transition metals, and infrastructure sectors, highlighting the company’s diversified exposure.
Engineering construction revenue jumped 33.7% to $405.4 million, fueled by $740 million in new contracts including work at Talison Lithium’s Chemical Grade Plant 3 and BHP’s Prominent Hill Expansion Project. Maintenance and industrial services revenue remained robust at $645.1 million, supported by strong demand from energy sector clients such as Shell, Woodside, and INPEX, as well as sustaining capital works for BHP, Rio Tinto, and Fortescue.
Operational and Sustainability Highlights
Employee numbers grew to 6,394, with a total workforce of 7,289, reflecting ongoing recruitment to meet project demands. The company emphasized talent development, onboarding improvements, and diversity initiatives, including exceeding First Nations workforce participation and business spend targets.
Safety metrics remained stable, with total recordable injury frequency rates holding steady, while sustainability efforts advanced with community grants programs and progress toward Net Zero by 2050.
Positive Outlook Amid Industry Dynamics
Looking ahead, Monadelphous anticipates sustained strong demand in resources and energy sectors, driven by high production levels and increasing investment in decarbonisation and energy transition projects. The company forecasts high single-digit revenue growth for FY25 and improved operating margins, despite ongoing challenges such as skilled labour shortages.
Monadelphous continues to explore strategic acquisitions to bolster its market position and capitalize on a significant pipeline of renewable energy and infrastructure opportunities.
Bottom Line?
Monadelphous’ strong H1 momentum sets the stage for continued growth, but execution risks and labour constraints warrant close investor attention.
Questions in the middle?
- How will Monadelphous manage skilled labour shortages amid rising project demands?
- What impact will the termination of Albemarle contracts have on future revenues?
- Can the company sustain margin improvements as it scales new energy transition projects?
