SciDev awarded contract for work on Melbourne’s Metro Tunnel
In a promising development, SciDev Limited (ASX:SDV) has signed a Services Agreement with the CYP Design and Construction Joint Venture (CYP D&C) in relation to work on Melbourne’s Metro Tunnel Project.
By way of background, SciDev is a leader in the development and application of services, chemistry and process control for solids-liquid separation.
The company brings together world-class technology, chemistry, management and manufacturing capabilities to solve operational and environmental issues for the mining, water treatment, oil and gas and construction industries.
CYP D&C is a joint venture between Lendlease Engineering, John Holland and Bouygues Construction, the entity responsible for the design and construction of the Metro Tunnel Project’s twin nine-kilometre rail tunnels and five new underground stations in Melbourne.
The services agreement will focus on clay and water management associated with the Tunnel Boring Machines (TBM) active on the Metro Tunnel Project – East Precinct.
The professional services will be delivered by SciDev through its dedicated experts deployed on-site who will focus on the treatment of the TBM slurry, enabling effective dewatering, separation and disposal of solid waste and the recirculation of water to the process.
SciDev staff will be engaged on a schedule of rates and quantities.
The Metro Tunnel Project in Melbourne is Victoria’s largest public transport project, scheduled for completion in 2025.
Contract builds on record March quarter
SciDev has defied negative market sentiment over the last three months with its shares driven by strong news flow in relation to the company’s operational performance and corporate initiatives.
This has seen it significantly outperform the S&P/ASX All Ordinaries index.
Further, the company’s shares have increased more than ten-fold between May 2019 and February 2020.
During this period the company has started to generate significant free cash flow, leaving it well-placed to pursue further opportunities as they arise.
With the likelihood of government initiatives being undertaken to create employment opportunities through large infrastructure projects, there could be increasing opportunities for SciDev on the horizon.
In the interim, the company is performing well in the current environment having generated record sales of $4.8 million in March, substantially exceeding the total sales of $4 million for the three months to December 31, 2019.
This provided the foundation for record quarterly sales of $7.3 million with cash receipts of $5.8 million, resulting in the group’s first cash flow positive quarter.
Joint ventures and acquisitions
SciDev has also been busy on the corporate front with the acquisition of Highland Fluid Technology completed in March.
The group provides a range of chemicals and professional services to the onshore US oil and gas sector, bringing together technology and chemistry to improve water recovery, fluid economics and extraction performance.
The company via its strategic supply partner, Nuoer Group, expedited the first 400-tonne shipment of its MaxiFlox® Chemistry from China to West Texas during the month of March.
The delivery of product highlights the supply synergies and logistics capability of the group despite the challenging industry environment.
Direct chemical supply to oil service customers was successful during March, with sales to new SciDev customers recognised.
It was just last week that SciDev advised that it had strengthened its strategic relationship with the Nuoer Group of companies (the Nuoer Group) providing the group with an ability to target a greater pool of global business development opportunities.
SciDev and the Nuoer Group have entered into a new joint venture that combines the Nouer Group’s production and manufacturing skills with SciDev’s expert technical, marketing and sales capacity to jointly engage on world-wide business development opportunities.
The Nuoer Group will continue to provide chemical supply to SciDev and SciDev customers on commercial terms outside the new JV under existing arrangements, which have also been expanded.