By Simone Grogan, The West Australian
Belmont-based mining and civil contractor NRW has turned in a record set of results for 2024, with long-serving chief executive Jules Pemberton upbeat about a pipeline of iron ore work he says is as “positive as I’ve seen it”.
Shares in the company lifted some 10 per cent to $3.53 on the back of reported lifts in revenue, earnings and net profit, which climbed to $105 million from $85.6m in 2023.
Active tenders were at $5.5b in an overall pipeline of work worth some $16.4b, metrics Euroz Hartleys head of research Gavin Allen said in a note to clients indicated there was “plenty of demand in the system”.
Mr Pemberton was upbeat about the outlook for FY25, and the fact that the company had delivered its third year of growth since the pandemic, a period that marred results due to widely prevalent labour and materials shortages and cost escalations.
And despite recent price wobbles, the CEO told analysts the medium term outlook for iron ore projects in WA was as “positive as I’ve seen it” when asked.
He cited Rio Tinto’s commitment to keep churning out tonnes in the Pilbara regardless of prices, including the Rhodes Ridge mine, which the iron ore major has lodged environmental approvals for.
“Rhodes Ridge is a massive growth project. It’s the future of Rio’s business. So they have to do it. It’s the most profitable commodity in the group. They have to do it. Irrespective of (if) the iron ore price is $US80, US$100 bucks, US$110,” he said.
“The pipeline across West Angelas, Hope Downs, Jimblebar, Brockman…all the mines are getting significant expansions.”
Last year NRW was projecting about 26 per cent of its mining work and 14 per cent of its civil work would be in iron ore by 2026.
The world’s biggest steel producer Baowu sent shivers through iron ore markets this week when it compared conditions in the Chinese market to a “harsh winter”.
According to Bloomberg that’s triggered price futures to fall below $US94 a tonne, as data from China showed mills reduced steel production to about 83 million tonnes last month, 9 per cent lower than a year earlier.
Mr Pemberton said NRW had a “few challenges” in lithium, saying the company had to scale back at Arcadium Lithium’s Mt Cattlin project in Ravensthorpe.
NRW has built up its workforce to about 8000 after adding another 500 or so workers to the mix through its acquisition of Brisbane mining contractor HSE Mining, finalised earlier this month.
Mr Pemberton also said there had been reduced turnover among the company, an issue that has plagued WA companies across the board.
Wilson Asset Management senior investment analyst Shaun Weick dubbed NRW’s performance a “strong result” that came in ahead of expectations overall.
“Generally speaking it seems they (NRW) are very confident and comfortable around the labour market now,” he said.
And a call by NRW to bump up its bank debts was not necessarily for an “acquisition war chest” Mr Pemberton said, who said there was also ample opportunities to reinvest in the existing business.
Full year revenue in FY25 is expected to climb further to $3.1b after delivering $2.9b this year.
It remains to be seen whether the strong set of results will be enough to prevent the company copping another strike against its remuneration report at its annual general meeting.
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