Next Investors logo grey

SciDev awarded contract for work on Melbourne’s Metro Tunnel


Published 05-MAY-2020 12:06 P.M.


4 minute read

Hey! Looks like you have stumbled on the section of our website where we have archived articles from our old business model.

In 2019 the original founding team returned to run Next Investors, we changed our business model to only write about stocks we carefully research and are invested in for the long term.

The below articles were written under our previous business model. We have kept these articles online here for your reference.

Our new mission is to build a high performing ASX micro cap investment portfolio and share our research, analysis and investment strategy with our readers.

Click Here to View Latest Articles

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.

00 - SDV

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.

00a - SDV

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.

General Information Only

S3 Consortium Pty Ltd (S3, ‘we’, ‘us’, ‘our’) (CAR No. 433913) is a corporate authorised representative of LeMessurier Securities Pty Ltd (AFSL No. 296877). The information contained in this article is general information and is for informational purposes only. Any advice is general advice only. Any advice contained in this article does not constitute personal advice and S3 has not taken into consideration your personal objectives, financial situation or needs. Please seek your own independent professional advice before making any financial investment decision. Those persons acting upon information contained in this article do so entirely at their own risk.

Conflicts of Interest Notice

S3 and its associated entities may hold investments in companies featured in its articles, including through being paid in the securities of the companies we provide commentary on. We disclose the securities held in relation to a particular company that we provide commentary on. Refer to our Disclosure Policy for information on our self-imposed trading blackouts, hold conditions and de-risking (sell conditions) which seek to mitigate against any potential conflicts of interest.

Publication Notice and Disclaimer

The information contained in this article is current as at the publication date. At the time of publishing, the information contained in this article is based on sources which are available in the public domain that we consider to be reliable, and our own analysis of those sources. The views of the author may not reflect the views of the AFSL holder. Any decision by you to purchase securities in the companies featured in this article should be done so after you have sought your own independent professional advice regarding this information and made your own inquiries as to the validity of any information in this article.

Any forward-looking statements contained in this article are not guarantees or predictions of future performance, and involve known and unknown risks, uncertainties and other factors, many of which are beyond our control, and which may cause actual results or performance of companies featured to differ materially from those expressed in the statements contained in this article. S3 cannot and does not give any assurance that the results or performance expressed or implied by any forward-looking statements contained in this article will actually occur and readers are cautioned not to put undue reliance on forward-looking statements.

This article may include references to our past investing performance. Past performance is not a reliable indicator of our future investing performance.