Market Volatility Delays SciDev Revenue, But Growth Prospects Remain Strong
SciDev Limited reported a robust Q3 FY25 with revenue rising 10% and EBITDA tripling, driven by strategic US market expansion and a landmark PFAS remediation contract despite ongoing market challenges.
- Q3 revenue up 10% to $26.3 million
- EBITDA triples to $2.1 million from previous quarter
- Expanded US Oil & Gas market share, especially in Permian Basin
- Secured first US PFAS remediation contract with Department of Defence
- Revenue timing shifts expected into FY26 due to client delays
Solid Financial Performance Amidst Market Challenges
SciDev Limited has delivered a commendable third quarter for FY25, posting a 10% increase in revenue to $26.3 million and a remarkable 200% jump in EBITDA to $2.1 million compared to the previous quarter. This performance underscores the company's disciplined financial and capital management approach, which has helped it navigate a volatile market environment with resilience.
Strategic Advances in Key Markets
The company has made significant strides in expanding its footprint in the US Oil & Gas sector, particularly within the Permian Basin, a critical hub for exploration and production. By reducing customer concentration and growing its presence with targeted operators, SciDev is positioning itself for sustained organic growth. Additionally, the firm has secured a pioneering contract to treat PFAS-contaminated investigation derived waste at multiple US Department of Defence installations, marking a breakthrough in its water treatment business and tapping into the burgeoning market for sustainable environmental solutions.
Progress in Mining and Domestic Water Projects
Beyond Oil & Gas, SciDev continues to advance multiple mining opportunities, including a long-term trial with a global gold producer in Australia. Its domestic water business remains active, highlighted by the construction of a $5.6 million water treatment facility on a major infrastructure project in New South Wales. These initiatives reflect the company’s diversified approach to growth across water-intensive industries.
Navigating Market Volatility and Outlook
CEO Seán Halpin acknowledged the ongoing volatility in drilling and completion activities driven by fluctuating commodity prices, which are expected to persist through FY25. Despite this, demand for SciDev’s proprietary chemistry remains robust, underpinning improved margins and new contract wins. However, some revenue recognition is anticipated to shift into FY26 due to client-driven schedule changes, a timing issue rather than a demand shortfall. The company remains confident in its fundamentals and growth trajectory.
Governance and Reporting Updates
Supporting its strategic growth, SciDev has implemented board changes during the quarter. Meanwhile, the ASX has lifted the requirement for quarterly reporting, allowing the company to focus on delivering detailed updates at half-year, full-year, and AGM milestones while maintaining transparency on key developments.
Bottom Line?
SciDev’s strong quarter and strategic contract wins set the stage for growth, but revenue timing shifts warrant close monitoring.
Questions in the middle?
- How will client-driven delays impact SciDev’s cash flow and profitability in FY26?
- Can SciDev further leverage its PFAS remediation breakthrough to capture more US government contracts?
- What are the implications of board changes on the company’s strategic direction?