Synertec Corporation secures a contract for Chevron Australia-operated Gorgon Project

  • Mar 27, 2019 AEDT
  • Team Kalkine
Synertec Corporation secures a contract for Chevron Australia-operated Gorgon Project

The Richmond-based Synertec Corporation Limited (ASX: SOP) is a multi-disciplined engineering company which provides specialist engineering products and solutions mostly to the clients in highly regulated and complex industries such as defence, rail, oil and gas, petrochemical, biotechnology, pharmaceuticals, dairy, and water industries.

On March 27th, 2019, the company announced to have been awarded a contract to design, build and commission a new custody transfer system for the metering, sale, and transfer of condensates processed at the Chevron Australia-operated Gorgon Project. The new system is designed to offer reliability, high accuracy and extended data analytics.

Synertec Corporation has heavily invested and developed various innovations in the custody transfer technology that has helped extensively in the growth of the company over the years. The current opportunity will enable the company to leverage on its locally developed expertise from LNG custody transfer to a different, but closely related product stream and further refine Australian expertise in this area.

On February 22nd, 2019, Synertec released its financial results for the half-year ended December 31st, 2018, demonstrating immense progress and momentum achieved with the award of several large and strategically important projects. As per the report, the company posted revenue of $ 12.8 million, reflecting a rise of 173% by $ 8.1 million on $ 4.7 million in the prior corresponding period (PCP) ended December 31st, 2017. Besides, the profit from operating activities was recorded at $ 0.3 million, up $ 0.3 million on PCP, in line with its prescribed guidance.

Segment wise, the revenue from Fixed Price solutions increased by 337% to $ 9.48 million on PCP, and that from the Engineering Services rose by 50% to around $ 3.06 million.

Since the beginning of FY2019, the key projects that have been driving Synertec’s growth include the Newcastle Shipping Terminal Expansion; Metro Trains Melbourne involving the Critical fire and life system upgrade of the Melbourne Underground Rail Loop; design and building of a large state-of-the-art pharmaceutical facility in regional Victoria for a global household pharma brand; and the Jemena’s Northern Gas Pipeline project.

The company generated positive cash flows from most of its activities and maintained a strong working capital position. The net cash and cash equivalents at the end of the half-year amounted to ~ $ 4.70 million. The operating activities resulted in net cash inflows of around $1.25 million primarily on account of large cash receipts of $ 15.76 million from customers. However, the investing activities led to cash outflows of $ 59.5k mainly due to high payments for the acquisition of plant, property, and equipment. There were no financing activities undertaken during the period.

Back in January 2019, Synertec completed the sale of shares as per the implementation of a Small Holding Sale Facility (as announced on October 25th, 2018) for shareholders who own less than $ 500 value of SOP shares. A total of 1,053,559 shares were sold at a volume weighted average price of 4.67 cents per share.

The company’s closed the day’s session (As on 27 March’19) flat at A$0.045.


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