Service Stream Secures $455 Million in Utility and Energy Contracts
Service Stream has locked in $455 million worth of new contracts, including a $405 million nine-year deal with Yarra Valley Water and $50 million in power station outage works in Queensland, boosting its infrastructure services footprint.
- Nine-year $405 million contract with Yarra Valley Water
- Three-year $50 million agreements with Millmerran Operating Company
- Expansion of annuity-style revenue streams
- Strengthened presence in critical utility and energy infrastructure
- Operations to commence October 2026 for water contract
Long-Term Water Maintenance Contract with Yarra Valley Water
Service Stream Limited (ASX:SSM) has secured a substantial nine-year contract valued at $405 million with Yarra Valley Water, Victoria's largest water utility. The contract covers mechanical, electrical, and civil maintenance services across the Northern Region of Melbourne’s water and sewerage networks, including treatment facilities. This deal forms part of Yarra Valley Water’s refreshed Maintenance Services Delivery Partners program, which splits operational delivery into Northern and Southern regions. Service Stream will commence mobilisation immediately, with operations slated to begin in October 2026.
This contract not only diversifies Service Stream’s portfolio but also aligns with its strategy to increase annuity-style revenue and expand its secured work-in-hand, building on the company’s already robust order book. The award strengthens its position in the utility sector, servicing critical infrastructure for over two million residents in Melbourne’s northern and eastern suburbs. The deal follows Service Stream’s recent momentum, which includes a record $7.6 billion work-in-hand and a $4.2 billion contract haul in FY25 record $7.6bn work in hand.
Power Station Outage Contracts in Queensland
In Queensland, Service Stream has landed two contracts with Millmerran Operating Company (MOC) at its Millmerran Power Station, collectively worth $50 million over three years. These contracts cover major and forced outage works, including access provision, mechanical inspections, testing, overhauls, and repairs on the boiler and balance of plant for the 425MW units.
Managing Director Leigh Mackender highlighted that these agreements reinforce Service Stream's footprint in Queensland’s energy infrastructure and its role as a trusted partner in critical asset maintenance. The contracts complement the company’s existing energy infrastructure services and contribute to its ongoing expansion in the utilities sector, following the company’s strong FY25 performance with a 37% profit surge and a $4.2 billion contract backlog $4.2bn in contracts.
Strategic Implications and Operational Readiness
These new contracts bolster Service Stream’s annuity-style revenue streams, providing long-term visibility and diversification across essential services. The Yarra Valley Water contract’s immediate mobilisation phase suggests the company is gearing up for a significant operational ramp-up in Victoria, while the Millmerran contracts extend its reach in Queensland’s energy sector.
While no explicit financial guidance or margin impact was disclosed, these deals are likely to contribute positively to Service Stream’s revenue profile in the coming years. The company’s ability to secure such sizable contracts amid a competitive market underscores its operational capabilities and trusted status in critical infrastructure maintenance.
Bottom Line?
Service Stream’s latest contracts deepen its hold on vital utility and energy infrastructure, setting up a steady revenue runway but raising questions about execution risks during mobilisation.
Questions in the middle?
- How will the new contracts impact Service Stream’s margin profile over the next three to nine years?
- What operational challenges might arise during the mobilisation phase for Yarra Valley Water’s Northern Region?
- Could these contracts pave the way for further expansion in Queensland’s energy infrastructure sector?
