Decmil (ASX:DCG) wins AU$98M contract, shares gain over 6%

Image Source: © Michalsuszycki | Megapixl.com

Highlights

  • Decmil Group has been awarded the second phase of the Albany Ring Road Project.
  • This follows the satisfactory development and completion of the majority of Stage 1 of the project.

 

Decmil Group Limited (ASX:DCG) has received AU$98 million Albany Ring Road contract Stage 2, according to an ASX filing today (29 June 2022).

Following the satisfactory development and completion of the majority of Stage 1 of the Albany Ring Road Project, Decmil Group has been awarded the second phase of the Albany Ring Road Project by Main Roads Western Australia (MRWA).

The second phase's contract price is $98 million and it increases the $55 million value of the Stage 1 contract that was previously granted. The second phase was originally listed as "preferred" in Decmil's work-in-progress number but is now listed as "contracted." The Albany Ring Road project now has a total cost of $154 million.

Meanwhile, shares of Decmil were trading 6.45% higher at AU$0.099 per share on ASX today at 12.01 PM AEST.

Source: © Nito100 | Megapixl.com

What does the work package include?

The construction package includes an 11.5 km freight route that will connect to Princess Royal Drive and run parallel to Link Road south of the intersection of Menang Drive and Albany Highway.

The new road will be built around the City of Albany by connecting to current highways and enhancing access to the Mirambeena Strategic Industrial Area. Deliveries of the project take place in two phases:

Image Source: © 2022 Kalkine Media ®

Data Source- Company announcement dated 29 June 2022

Since October 2020, Decmil has started working on Stage 1 of the Albany project. It is expected that the project would finish in late 2024.

Earlier on 1 June 2022, the company said it was awarded five new contracts totalling AU$137 million. According to the company, two contracts are in Victoria, and three are for projects in Western Australia.

Image Source: © 2022 Kalkine Media ®

Data Source- Company announcement dated 29 June 2022

Revisions to mezzanine debt finance

Decmil altered its debt agreements with PURE Asset Management and the Franco Group-controlled Horley Pty Ltd. These lenders provided Decmil with a mezzanine loan to lower the coupon rate and lengthen the loan maturity financing of AU$20 million.

According to Heale, Decmil's solid long-term outlook is reflected in the improved loan conditions, which also increase financing security as Decmil grows its order book with new, superior contract awards.

The company's order book currently stands at AU$600 million, its best position since 2019.


 


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