Downer’s (ASX:DOW) subsidiary receives AU$630M contract

September 17, 2022 09:02 AM AEST | By Sonal Goyal

Downer’s (ASX:DOW) subsidiary receives AU$630M contract — Image source: © Artursfoto | Megapixl.com

Details of the contract

According to the ASX announcement, the contract value is around AU$630 million for over seven-and-a-half years. Reportedly, the company would commence work from the first month of the calendar year 2023.

Downer would provide minor works projects, vacant restoration, and reactive maintenance to public and social housing dwellings as a part of the contract. The works will include roofing, painting, electrical, plumbing, refurbishment and upgrade works. Also, crucial maintenance services to public housing residents will be included.

The services would be offered to around 27,000 dwellings.

Management Commentary

Grant Fenn, chief executive officer, Downer, commented on the development:

Another contract awarded to Downer recently

A few weeks back, Downer announced through ASX announcement that it has received a 10-year city of Gold Coast contract. Under the contract, the company would offer asset lifecycle delivery services to the water and sewerage networks of City of Gold Coast.

Reportedly, the contract commenced in August 2022 and is expected to generate revenue of AU$250 million for Downer.

The scope of the work comprises a refurbishment and renewal program, reactive and planned maintenance and repairs and capital works.

The contract would offer sewerage and water supply services to the second largest government area of Australia.

Share performance of Downer

The day Downer announced about the SA Housing Authority maintenance contract, the shares were buzzing in the red territory. In the last five trading sessions, the share price marked a fall of around 3.45%, and in one month, it fell by nearly 9%. On a year-to-date basis, the share price has declined nearly 20.50%, and the yearly fall is approximately 28%.

The market capitalisation of Downer is AU$3.30 billion.

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