SMEC Holdings Ltd Annual Review 2012-2013
Total Page:16
File Type:pdf, Size:1020Kb
Annual Review The SMEC Group | Annual Review 2012-2013 The SMEC Group 2012-2013 Contents Image: Adelaide Desalination Plant, Australia Chairman’s Message 4 CEO’s Message 6 About SMEC 8 Corporate Social Responsibility 10 Global Network 12 Chief Technical Principals 14 Australia & New Zealand 16 Asia Pacific 20 South Asia & Middle East 24 Africa 28 Mining, Oil & Gas 32 Transport 36 Water 38 Environment 40 Hydropower & Energy 42 Geotechnics & Tunnels 44 Urban Development 46 Social Development 48 Government & Advisory Services 50 The SMEC Group Annual Review 2012-2013 3 Chairman’s Message The business has grown substantially in the 2012-2013 SMEC’s Mining, Oil & Gas Division was adversely affected financial year, with the addition of Vela VKE. The SMEC by the slowdown in mining spend in Australia, North and Group now employees more than 5,000 people across its South America, contributing profit (before income tax) of operations in Australia, Africa, Asia Pacific, South Asia, the A$3.5M for its first full financial year. To better position the Middle East, North and South America. Mining, Oil & Gas Division for the year ahead, the Board has recommended a series of structural changes to GMC Global. Despite this growth, the 2012-2013 financial year has been These changes combined with stabilised resource prices, has challenging. The operating environment for both public infrastructure and mining services deteriorated in Australia, made the Board confident that the Mining, Oil & Gas Division whilst SMEC’s international operations had to contend with a will improve in the year ahead. high Australian Dollar (exchange rate) for most of the year. SMEC’s three International Divisions collectively improved Fee revenue for the 2012-2013 financial year increased by their profitability (before income tax) by 72.5%, from A$7.6M 10% from A$317M, to A$348.8M. SMEC’s International to A$13M. This was a solid result in an environment where Divisions (Africa, Asia Pacific, and South Asia and Middle the Australian Dollar remained strong, putting significant East) contributed 44.6% (A$155.5M) to total fee revenue. Vela pressure on margins. The best performing operations were VKE (SMEC South Africa) greatly contributed to this result. SMEC’s Africa Division, as well as the Pacific Region and the SMEC’s Australia and New Zealand Division contributed South Asia 2 Region. 43.1% (A$150.3M), whilst the new Mining, Oil & Gas Division This was the first full year of operations for SMEC’s contributed 12.3% (A$43M) to total fee revenue. international business since consolidating the Company’s Profit before tax overall was disappointing, decreasing by international divisions to three, as part of SMEC’s Localisation 17.2% from A$30.4M to A$25.2M. Impacted by the slowdown Strategy. Focused on localising, diversifying and expanding in infrastructure spending across all states in Australia, international operations, the Localisation Strategy is already SMEC’s Australia and New Zealand Division’s profitability having a direct benefit on the international business. (before income tax) decreased from A$21.9M to A$8.7M. Developing local people is a key differentiator for SMEC. 4 The SMEC Group Annual Review 2012-2013 PETER BUSBRIDGE ROSS HITT ALASTAIR MCKENDRICK Chairman Managing Director & Director & Group Finance Director Chief Executive Officer ROGER BAYLISS KATE SPARGO MAX FINDLAY Non-Executive Director Non-Executive Director Non-Executive Director THE SMEC BOARD SMEC’s new company tagline, ‘Local People. 15 November 2012, Bob retired from the SMEC Holdings Global Experience.’ exemplifies how SMEC operates. Board after serving for 16 years. Bob served the Company as an independent Non-Executive Director and provided great SMEC management have worked through a tough operating leadership to the Board as the Chairman of the Board (2001 to environment this financial year, examining the business and 2009) and the Chair of the Audit Committee (1996 to 2013). making the necessary changes to reshape the Company to meet the changing environment. The Board is now confident In November 2012, SMEC launched The Spirit of SMEC at that SMEC is well placed for growth in the 2013-2014 Parliament House, in Canberra, Australia. The Spirit of SMEC financial year and beyond. explores the life and times of the people who have made SMEC what it is today. It is a book that portrays SMEC’s The recent fall in the Australian Dollar has provided some multicultural heritage and the pioneering spirit of SMEC’s relief as SMEC re-prices its offshore earnings and assets. people, it also tells the story of SMEC’s successful transition If it remains below parity or moves lower than current levels, from a government body to a privatised company. SMEC will continue to see improvements in the financial performance of international projects and competitiveness in The Spirit of SMEC is proudly dedicated to Doug Price the international market will also improve. (Managing Director 1975 to 1989) who is regarded as the Father of SMEC. Ross Hitt (CEO) and I visited Doug to The slowdown in infrastructure spending across all states present him with the book he helped create. This very special in Australia is likely to improve with the federal election book is available for sale via the SMEC website. now finalised. We anticipate that the new Government will renew and expand Australia’s infrastructure. SMEC is well positioned to be a key player in delivering major infrastructure developments in Australia. Peter Busbridge On behalf of the Board, I would like to formally acknowledge Chairman the retirement of a great Director, Bob Scott. Effective SMEC Holdings Limited The SMEC Group Annual Review 2012-2013 5 CEO’s Message I am pleased to note that SMEC improved its ranking in Also making awards headlines was SMEC’s Transport Engineering News Record’s (ENR) 2013 design lists. SMEC Group. SMEC’s Gateway Upgrade Project was awarded is ranked at number 57 in the ‘Top 225 International Design Engineers Australia’s (Queensland) Engineering Excellence Firms’ list, and number 74 in the ‘Top 150 Global Design Award (A$50M+), and the prestigious R.W. Hawken Firms’ list. It is very pleasing that SMEC is maintaining its Award. SMEC’s Ballina Bypass Alliance won the Alliancing strong position within the global consulting market in such a Association of Australia’s Alliance Team of Excellence challenging operating environment. Award, and the Civil Contractors Federation’s Earth Award (New South Wales, A$75M+). SMEC had a great year winning industry awards across diverse sectors. SMEC’s Water Group won two Global Water SMEC’s winning streak did not stop with projects, Jared Awards; Victoria Desalination Plant won the Desalination Cooke (Highways Manager, based in Brisbane) won Consult Plant of the Year Award, and Sydney Desalination Plant won Australia’s Future Leader Award. On behalf of SMEC, I the Desalination Deal of the Year Award. The Condamine congratulate Jared for winning such a prestigious award. Alliance also won multiple awards; the United Nations Jared joined SMEC in 2000 and is an outstanding engineer. Association of Australia’s World Environment Day Biodiversity Award, the International RiverFoundation Award, and the SMEC’s Corporate Social Responsibility Program is making Banksia Environmental Foundation Award. progress through the increased activity of the SMEC Foundation. In the 2012-2013 financial year the SMEC Urban Development projects won key awards across Foundation donated more than $170,000 to 28 projects Australia; Linking Canberra City to the Lake won the Planning around the world. The SMEC Foundation’s response to the Institute of Australia’s award for Policies, Programs, and April 2013 building collapse in Dhaka was great, raising Concepts (Large Scale), Cardinia Lakes won the Urban over A$20,000. All funds went directly to people who were Development Institute of Australia’s (Victoria) Residential injured, or to the relatives of people that lost their lives. Development Award (>250 lots); and Breezes Muirhead won the Planning Institute of Australia’s Award (Northern Territory) We further implemented SMEC’s Localisation Strategy and for Best Planning Idea (Small Ideas). established three stand-alone International Divisions; Africa, Asia 6 The SMEC Group Annual Review 2012-2013 ROSS HITT ALASTAIR MCKENDRICK NEIL EVANS ANGUS MACPHERSON Managing Director & Director & Group Finance Director Director Strategy & New Business Director Corporate Affairs Chief Executive Officer TOM MARSHALL MANOLI LOUKAS HARI POOLOGASUNDRAM ANDY GOODWIN Chief Operating Officer Chief Operating Officer Chief Operating Officer Chief Operating Officer Africa Asia Pacific Australia & New Zealand South Asia & Middle East THE SMEC EXECUTIVE COMMITTEE Pacific and South Asia and Middle East. Each Division has full GMC has been adversely impacted by the mining downturn. resource ownership, and a Chief Operating Officer who reports to In response, a new business strategy for GMC was developed the CEO. These changes were effective from 1 July 2012. and will involve working more collaboratively with SMEC. Other changes include establishing Australia/Asia and International as Strengthening our technical capabilities is another priority. separate divisions, each with their own Chief Operating Officer. This year we strengthened the positions of key technical These changes are already having a positive impact. experts, referred to as Chief Technical Principals (CTPs). SMEC has 26 CTPs across the Company who are industry We have also made recent changes to our oil and gas business leaders, responsible for providing high-level technical advice. in Pakistan, whereby CEIS has formally changed its name to Four of SMEC’s CTPs have come from the recent addition of SMEC Oil & Gas (Pvt.) Ltd. Delivering detailed engineering the new SMEC South Africa (Vela VKE). services to Greenfield and Brownfield oil and gas production projects, there is a lot of scope to grow the business. Vela VKE joined SMEC in July 2012.