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- Decmil’s operation was highly disrupted in Melbourne and Western Australia due to the impacts of COVID-19.
- Decmil’s new expected EBITDA is AU$15- AU$10 million.
- Decmil’s CEO decides to step down from his position.
- The company shares fell significantly on the ASX post this announcement.
The shares of Decmil Group Limited (ASX:DCG) traded 15.790% lower at AU$0.160 per share at 10:48 AM AEST on the ASX today (8 April). Approximately 646,000 shares of Decmil were traded till now during today’s trading session on the ASX.
The company released upgraded financial guidance and operational activities for the rest of the 2022 financial year (FY22).
The share price of Decmil has fallen over 72% on the ASX over the past 12 months. On the other hand, Decmil’s year-to-date share price also fell by 50% at 10:48 AM AEST on the ASX today (8 April).
Details about Decmil’s upgraded financial guidance:
Decmil announced today that several projects of the company in Queensland and Western Australia had suffered huge losses due to supply chain delays, cost escalation, and interstate travel restrictions due to the COVID-19 lockdown.
The company has incurred regrettable losses, which have been reflected in its recent estimates of the cost to complete and its contractual entitlement to recover under the respective contracts.
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In addition to the causes mentioned above, the company also had to experience delays in its project commencements on two windfarms, Crookwell and Ryan Corner. Decmil was awarded the construction contracts in these windfarms. However, it had impacted the company’s short-term revenue outlook.
However, Decmil was not responsible for the delays. The company was informed now that Ryan Corner has received all permits, and work on-site must begin in April 2022. Meanwhile, Crookwell is still awaiting permits to begin work.
Therefore, as per the current market conditions, Decmil expects its FY22 EBITDA to be in the range of AU$15- AU$10 million. Decmil’s expected revenue in FY22 is now in the range of AU$425-AU$450 million.
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Decmil board commentary on the Revised FY22 guidance:
Dickie Dique, the CEO of Decmil, described the financial forecast result as ‘very disappointing because it was highly driven by two causes- cost overruns at a Queensland Road project and the financial collapse of a subcontractor in Western Australia. These two factors reflected a negative image of the company’s work portfolio.
Dique also said that the company had to report the expected total loss on its projects in FY22. He expects Decmil to recover some of its losses in FY23.
Nevertheless, the company will continue to grow and successfully deliver its deliverables across all of its core expertise areas. In addition to that, the company will also work to improve its exposure to high growth industries.
Dique also added that, by now, the company has successfully increased the proportion of lower-risk alliance style contracts in its financial books.
Change in company board:
In addition to releasing the revised financial guidance for FY22, Decmil also announced that its CEO, Dickie Dique, has determined to step down from the position of CEO of the company. The board of Decmil has already begun to search for the appropriate candidate to takeover Dickie’s position. Dickie will continue to be associated with Decmil as a director of the company as of now.
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