The novel coronavirus, COVID 19 has propelled companies to be constantly vigilant of work environments and re-visit their near- and long-term plans.
Multi-disciplined engineering and construction company, Saunders International Limited (ASX:SND) has also implemented a rigorous set of procedures and protocols to ensure safe operational continuity. Currently, SND is working through the detailed scenarios and business continuity planning with the aim to minimise supply chain and other operational business interruptions.
While monitoring the rapidly changing impact of COVID 19 across its operations, the Company has demonstrated trust and confidence the market has in its services, by bagging a design and construction contract amid the pandemic situation.
Design & Construction Contract for Sydney B4A Terminal Expansion Project
Saunders offers design, fabrication, construction, and maintenance services to leading organisations across Australia and the Pacific realm to the bulk liquid storage, industrial, energy and resources sectors.
On 22 April 2020, SND announced to have secured a design and construction contract for three tanks as part of the Sydney B4A Terminal Expansion project at Port Botany. The contract valued at almost $20 million has strengthened the Company’s orderbook to $108 million.
Under the contract, SND’s scope of works comprises of design, ground improvements, civil foundation, and the construction of three diesel tanks with geodesic dome roofs and a 35 megalitre capacity, each. With mobilisation and sites works set to begin at once, the Company will continue works through FY21. The project will contribute revenue from the second half of FY20 through FY21.
Saunders’ COVID 19 Update
On 21 April 2020, SND notified that it has taken decisive action and a pro-active approach to the virus environment, aimed towards ensuring the team safety at the forefront of all decisions. Optimistically, there has been no confirmed cases of COVID 19 at the Company, which is well prepared if this position were to change.
Let us cast an eye to the operational impacts of the pandemic highlighted by SND.
Social Distancing Guidelines
The Company sites are adhering to the required social distancing guidelines, which have altered the approach to daily operations like staggering pre-starts toolbox talks and lunch breaks.
Client Work Continues
SND is continuing to work with all its clients ensuring that operations continue with minimal impact. However, safety and welfare of all employees, contractors and customers remain pivotal. Apart from being adaptive to the situation, the Company continues to look at better ways to operate, including alterations to shift patterns.
No Supply Chain Impact
The virus did not have any serious impact on SND’s supply chain to date, both locally and internationally. It continues to be in close contact with all suppliers to reduce business interruptions.
Remote Working Norms
In line with government regulations, SND’s head office is currently closed with staff working remotely. The Company makes use of a geographically mobile work force to deliver services across several states. There has not been any prevention for employees from travelling interstate and they have not had the situation to self-isolate.
Current Focus Areas
SND acknowledges the fact that there is a slight possibility of reduced productivity and project delays, given the operational changes. The Company is gauging the same and believes that it is too early to speculate on any outcomes.
The current focus areas are-
- Ensure good health and wellbeing of the Company’s teams and customers
- Safeguard business continuity in these unprecedented and challenging times
- Preserve cash by turning off all non-essential capital expenditure and discretionary spending
SND team has positively reacted and demonstrated great resilience in the current challenging time. With activities and work sites continuing to operate (subject to the changes), currently, SND seems to be well-positioned to sail through the current situation.
As instigated, it is too early to forecast whether operational changes will cause low productivity and delays in the delivery of SND’s current order book, which has been recently bolstered by the Sydney B4A Terminal Expansion project contract.
SND was trading at $ 0.470 on 23 April 2020 (AEST 02:24 PM), up by 2.174% from its previous close. The stock has delivered a positive return of 21.05% in the last one month and 84% in the last six months.