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Monadelphous punished for profit plunge

AAP logoAAP 23/08/2016

Mining services player Monadelphous Group has been savaged by investors after full-year profit fell 37 per cent due to the sustained slowdown in the resources sector.

Monadelphous reported net profit of $67 million for the year to June 30, down 36.7 per cent on the previous year, while sales revenue was 26.8 per cent lower at $1.37 billion.

Managing director Rob Velletri said demand had fallen as resource and energy sector customers focused on cutting costs and reducing expansion in an environment of historically low commodity prices.

Monadelphous said tough conditions would continue, with business expected to be "challenging" in coming years due to a dearth of new contracts and surplus capacity among service providers keeping profits slim.

"While opportunities for new major resource and energy construction contracts are expected to remain at low levels, we are well placed to capitalise on growing maintenance opportunities," Mr Velletri said in a statement on Tuesday.

Monadelphous shares were down 2.03 or 18.6 per cent to $8.90 by 1254 AEST.

MONADELPHOUS 2015/16 RESULTS

* Net profit down 36.7 per cent to $67m

* Revenue down 26.8 per cent to $1.37b

* Final dividend 32 cents, fully franked, down from 46 cents. Full year dividend 60 cents.

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