Duratec Limited (Duratec, ASX: DUR) is a specialist engineering and infrastructure services provider, focused on upgrading and extending the life of critical assets across defence, mining, energy, and transport sectors. The company operates nationally across 19 locations, servicing major clients in both government and private industries. As of 20 February 2025, Duratec’s share price was AUD 1.74. With a growing order book and strong financial position, the company remains well-positioned to deliver long-term, sustainable growth.
Revenue Growth and Margins Improve Amid Sector Recovery
Duratec reported 1H FY25 revenue of $287.3 million, a 1.9% decline from 1H FY24, primarily due to reduced defence and mining sector activity. However, revenue rebounded 9.2% compared to 2H FY24, reflecting a strong recovery in energy and infrastructure contracts. The company’s gross margins improved to 18.5%, up from 16.2%, supported by a shift towards higher-margin projects and early contractor involvement (ECI) engagements. Normalised EBITDA rose 12.3% to $26.9 million, benefiting from operational efficiencies, while net profit after tax (NPAT) increased 6.1% to $13.0 million. The company’s continued focus on financial discipline has allowed for a 16.7% increase in interim dividend payments, demonstrating strong cash flow resilience.
Major Project Wins Strengthen Order Pipeline
Duratec’s order book stands at $410 million, supported by a tender pipeline of $1.6 billion and a long-term project pipeline of $4.1 billion. Recent contract wins reinforce the company’s ability to secure high-value, long-term projects across defence, mining, and energy markets. Among its recent awards, Duratec secured a $21.8 million KBSB Wharf Refurbishment contract with Woodside, marking its first direct engagement with the energy giant. In the mining sector, the company won a $44 million structural integrity project with Rio Tinto, further expanding its presence in critical resource infrastructure. Additionally, Duratec secured a Berth C&D project with BHP, with an extended scope valued at $5 million.
In the defence sector, the company continues to build momentum with Early Contractor Involvement (ECI) contracts at HMAS Stirling worth $1.9 million and $8.1 million, positioning Duratec for potential larger-scale project awards in FY26. These contract wins highlight Duratec’s strategic growth across multiple high-demand infrastructure segments, ensuring long-term revenue visibility.
Strong Financial Position and Increased Dividends Support Growth Strategy
Duratec’s cash balance of $60.8 million provides financial flexibility, supported by 84% cash conversion, reflecting effective working capital management. The company successfully negotiated a 69% increase in banking facilities to $294.1 million, strengthening its financial capacity to fund future expansion. Additionally, Duratec finalised the $2.2 million acquisition of GF Engineering, enhancing its fabrication capabilities and expanding its service offerings in the industrial sector.
A key highlight of the company’s strong financial position is its 1.75 cents per share interim dividend, reflecting a 16.7% year-on-year increase. This decision aligns with Duratec’s strategy to balance growth investments with sustainable shareholder returns, reinforcing confidence in its long-term cash flow stability.
Expanding Market Presence and Driving Long-Term Growth
Duratec remains well-positioned for 2H FY25 and beyond, with continued growth expected in energy, mining, and transport infrastructure projects. The company reaffirmed its FY25 revenue guidance of $600 million to $640 million, with EBITDA projected between $52 million and $56 million.
With a diverse project pipeline, strong cash reserves, and a disciplined approach to contract selection, Duratec is poised to capitalise on future infrastructure investment opportunities. Investors will be watching for contract conversions, project milestones, and further expansion into high-margin sectors, which will be key drivers of long-term value creation.