Factors behind Saunders’ (ASX:SND) bright outlook for FY23

Highlights

• Saunders International Limited (ASX:SND) is going strong in FY23 with multi-million-dollar project wins.
• The company’s strategic outlook is focused on tapping opportunities in the defence, maintenance, and infrastructure space.
• SND eyes further opportunities in the Government’s ‘Boosting Australia’s Diesel Storage Program’(“BADSP”).

Saunders, an ASX-listed multi-disciplined engineering and construction firm, has been actively contributing to the development of Australian industries for over seven decades. The company’s reliable, innovative and cost-effective solutions, along with trouble-free project delivery, have led to an expanded client base across the sectors serviced. 

During the FY22 financial year, Saunders saw strong financial results despite the challenging operating landscape brought about by Covid and the supply constraints brought about by the conflict in Europe.

In FY23, the company continues to leverage market opportunities while managing ongoing supply and labour uncertainties. Recent project wins worth multi-million dollars substantiate the company’s ability to deliver operational excellence for large complex projects.

These latest developments are in line with the company’s strategic outlook.

Boosting Australia’s fuel storage capabilities

Saunders is in a strong position to tap the opportunities offered by the Australian government as part of its plan to boost the country’s diesel storage capabilities. An investment of more than AUD400 million is anticipated, for the construction of the remaining projects for the period FY22 to FY24.

In October 2022, Saunders won two projects worth AUD44 million and AUD9 million, for the aviation fuel terminal at the new Western Sydney International Airport and a diesel storage tank at Park Fuels, Kooragang Island, Newcastle, respectively.

The Park Fuels diesel storage tank contract is part of the government's ‘Boosting Australia’s Diesel Storage Program’. 

These project wins confirm the market’s confidence in the company's design and construction capabilities, and have significantly boosted the company’s financial outlook and its ability to meet its strategic goals.

Image Source: Company Live Camera - Project Caymus NT, 24 November 2022

Opportunities in the infrastructure space

Saunders has over 50 years’ experience servicing the needs of infrastructure clients.

Under the NSW Government’s “Fixing Country Bridges” program, projects worth AUD300 million are yet to be awarded. The program is focused on the replacement and/or maintenance of aging timber bridges across the regional road network.

The company confirms there has been increased demand for complex precast components as part of the NSW infrastructure boom.

In August this year, Saunders secured AUD24 million in new projects, including restoration and development activities. Focused on NSW, these projects include:

• Design and construction of three bridges.
• Fabrication and supply of Super T’s and precast components.
• Design and integration of monitoring and control systems.
• Fuel terminal tank refurbishment.

Image Source: SND Database - Precast Yard, 2 November 2022

Expanding defence service offerings

Saunders is looking to expand its service offerings, such as industrial automation capabilities to existing clients in the defence space.

The company is closely following the Government’s ‘Defence Fuels Transformation Program’ (DFTP). The second tranche of the program is estimated to have a budget of AUD500 million from 2022 to 2026, and Saunders has identified elements in this program which will provide opportunities for its services.

Tapping maintenance opportunities

Saunders is keen to use its recent terminal experience at Mobil and the expertise it has in the utilities and industrial sectors, to expand its order book going forward.

The company intends to secure long-term national maintenance contracts, aimed at converting the growing pipeline of new opportunities.

Latest developments and the company’s ability to leverage its expertise indicate that Saunders is leaving no stone unturned to meet its strategic objectives, and cash in on the wide range of opportunities.

SND shares traded at AUD1.155 on 30 November 2022.