Good morning, ladies and gentlemen, and welcome to the 2025 Monadelphous annual general meeting. As it's now 10:00 and we have a quorum, I declare this meeting open. My name's Phil Trueman. I'm the CFO and Company Secretary here at Monadelphous. I'd like to commence today's proceedings by introducing Laurah Phillips, our Learning and Training Advisor in our Indigenous Engagement Team, for an acknowledgment of country. Laurah supports the engagement of Aboriginal and Torres Strait Islander peoples within Monadelphous and plays a key role in the retention, development, and attraction of our Indigenous employees. Welcome, Laurah.
Kaia, Wanju, Monadelphous Moor. Good morning and welcome to Whadjuk Country. My name is Laurah, and I'm delighted to be here to open this AGM and present this acknowledgment of country. We are holding this meeting on the lands of the Whadjuk people, who are the largest of the 14 language groups of the Noongar Nation. Whadjuk Country extends from Yanchep to the North, Mandurah to the South, and York to the East, covering a total of 6,700 sq km. The photo on the slide is a recent Polly Farmer Follow the Dream Scholarship Morning Tea. Through the Follow the Dream program, we aim to attract and develop young First Nations people in the interests of the resources sector. During the year, we're proud to extend our partnership with the Polly Farmer Foundation for a further two years.
Finally, I'd like to acknowledge the Whadjuk people, the traditional owners of the lands we meet today, and our primary respect to all Aboriginal and Torres Strait Islanders joining us today. Thank you.
Thanks, Laurah. Today's meeting is being held at the University of Western Australia as well as online to ensure that all of our shareholders, proxies, and guests have the opportunity to attend either in person or virtually. For those of you in the room today, I'll quickly go through some safety information. In the case of an emergency, you'll hear an alarm and directions over the PA system telling you to evacuate the premises. Please do so immediately, following the fire exit signs at the front of the auditorium. The club's fire wardens will be on hand to assist, and you'll be directed to assemble at the far corner of Riley Oval near the Dolphin Theatre. Please remain on the oval until you're instructed to return to the building.
As we're also running the meeting virtually today, there is a very small chance that despite all of our preparation and backup plans, technical difficulties may arise during the meeting. In the unlikely event this does occur, our Chair has the discretion as to whether and how the meeting should proceed, having regard to the number of shareholders impacted and the extent to which participation in the meeting, in the business of the meeting, is affected. Should there be any technical difficulties, we will publish a notification on our website as soon as possible. For those attending online, questions can be submitted via the online Computershare meeting platform at any time. If you'd like to ask a question, select the Q&A icon and type your question in the question box. Once you finish typing, press the send button.
You'll be able to submit questions on the platform throughout the meeting up until we commence question time. Any questions that have not been addressed in the presentation or have not been answered previously will be put to the board at the end of the meeting. Please note that questions may be moderated, and if we receive several questions on the same topic, we will amalgamate them. To ask a question verbally, please follow the instructions written below the broadcast. Due to time constraints, it might not be possible for us to answer all questions, but if this does happen, we'll answer them via email or by posting responses on our website. As usual, voting today will be conducted by way of a poll on all items of business, and there'll be time later in the meeting for voting here in the room.
However, in order to provide our online participants with enough time to vote, we'll shortly open the online voting for all resolutions. For our online attendees, if you're eligible to vote at this meeting, once voting opens, press the vote icon and all resolutions will be activated with voting options. To cast your vote, simply select one of the options. There's no need to hit a submit or enter button as your vote will automatically be recorded and you'll receive a vote confirmation notification on your screen. You can change your vote up until the time I declare voting closed. I now declare the online voting open on all items of business, and you can cast your votes at any time. I'll give you a warning before I move to close voting.
I'd now like to take the opportunity to introduce you to our board of directors and our executive management team. With us here in the room this morning from your left to right is our Chair, Rob Velletri, our Managing Director, Zoran Bebic, our Deputy Chair and Lead Non-Executive Director, Sue Murphy, and our Non-Executive Directors, Dietmar Voss, Helen Gillies, and Ric Buratto . We also have members of our executive management team here today, including Adam Cook, the EGM of our Engineering Construction Division, Alastair Reid, the EGM of our Maintenance and Industrial Services Division, and Dean Brajevic, our General Manager of Human Resources. In addition, representing our auditors, EY, we're joined in the room by Pierre Dragh. Welcome, Pierre, and thanks for joining us this morning.
Rob will commence today's AGM by providing an overview of Monadelphous's strategic progress over the last 12 months, and then we'll hand over to Zoran, who will speak in more detail about the company's highlights and performance for the 2025 financial year, as well as the outlook for the foreseeable future. Adam and Alistair will also speak to some highlights of each of their respective divisions. I'll then take care of the formal business of the day before opening to shareholders for questions and conducting the poll. I'll now hand over to our first speaker of the morning, our Chair, Rob Velletri.
Thanks, Phil, and good morning, everyone. I'm very pleased to present the chair's address for Monadelphous, marking another year of strong performance, real strategic progress, and exciting opportunities ahead. We've continued to deliver solid returns for our shareholders while building a stronger and more resilient business. Demand for our services remained strong throughout last year and into the current one, supported by long-term customer relationships and continued expansion of our services. We secured approximately AUD 2.3 billion in new contracts and extensions in the 2025 financial year, which is our highest on record. We have added a further AUD 570 million in new work since year-end, which provides ongoing momentum for this year. We achieved major contract wins across energy, iron ore, and renewables. In the energy sector alone, we were awarded over AUD 1 billion in major construction and maintenance contracts.
In the iron ore sector, which also remained a major contributor, our long-standing relationships with Rio Tinto, BHP, and Fortescue generated a strong pipeline of work. We continue to advance our long-term growth strategy, particularly in markets linked to the energy transition. Our renewable energy joint venture, Zenviron, delivered a strong performance, while the acquisition of Perth-based High Energy Service strengthened our capability in high-voltage services, electrical services. Last month, we also announced the acquisition of Kerman Contracting, a long-established design and construction business based in Perth, specializing in non-process infrastructure. Both acquisitions, which we'll talk more about shortly, broaden the scope of our services and strengthen our competitive position across key target sectors. Our ongoing success, of course, is down to our people. During the year, our workforce grew by more than 20% to around 9,100, reflecting elevated activity levels right across our business.
Our safety performance, however, fell short of expectations. Our 12-month total recordable injury frequency rate of 4.42 was disappointing, and we've launched targeted safety campaigns to lift that performance, with safety, as always, remaining our highest priority. We made important progress on our diversity commitments, exceeding all targets under our Stretch Reconciliation Action Plan, surpassing our Indigenous workforce participation target, and increasing our spend with Indigenous businesses. Gender diversity remained a key focus, and it was great to see several of Monadelphous's female employees recognised with industry awards. We also advanced our net zero initiatives, moving to electrifying our fleet, transitioning our operations to renewable power, and supporting our customers' decarbonisation objectives. Looking ahead, the long-term outlook for all our sectors remains strong, despite some global uncertainty in the shorter term.
Sustained production levels across most commodities continue to underpin demand for sustaining capital works and maintenance services, with investment in new projects in WA's iron ore sector expected to continue. The outlook for the energy transition and critical metals is strengthening, and the energy sector continues to present significant opportunities both in construction and in our maintenance services. Australia's net zero ambitions are driving a high level of activity across generation, storage, and transmission, and Zenviron is well placed to win further work in wind and battery energy storage sectors. In conclusion, Monadelphous is in a great position for continued success. We remain focused on earnings quality and a disciplined approach to long-term growth by broadening our services and diversifying our markets. We will continue to build a strong, resilient business and remain firmly committed to delivering solid, sustainable returns for our shareholders.
Now, on behalf of the board, I extend my deepest thanks to our dedicated team for their outstanding efforts. Also to our shareholders, customers, and communities for their ongoing confidence and support. I'll now hand over to Zoran to provide you with an overview of the performance of the business for the 2025 financial year and the outlook.
Thanks, Rob, and good morning, everyone. A big welcome to Gail Rubino, who's here with us today. Thanks for joining us, Gail. It has been a very good year for Monadelphous, so let's start by having a look at how we performed in FY 2025. Monadelphous delivered revenue of AUD 2.27 billion, up 12% on last year, thanks to a lift in construction activity. Earnings before interest, tax, depreciation, and amortization came in at AUD 158.2 million, a 24.2% increase, with the EBITDA margin improving from 6.28% - 6.98%. Around a third of this uplift was due to non-operating items, mainly insurance proceeds, with the rest coming from stronger underlying performance. Higher operating margins helped drive net profit after tax up to AUD 83.7 million, a 34.6% increase, which translates to earnings of AUD 0.85 per share.
The board declared a final dividend of AUD 0.39, bringing the full-year fully franked dividend to AUD 0.72 per share and 85% payout ratio. We finished the year with a strong cash balance of AUD 205.8 million. Operating cash flow was AUD 81 million, with a conversion rate of 77%. Our balance sheet strength continues to give us the ability to invest in opportunities. This year, that included acquiring High Energy Service and, more recently, Kerman Contracting. We secured around AUD 2.3 billion in new contracts and extensions up to 30 June 2025, and we've secured another AUD 570 million of work in this new financial year. This slide shows the size and location of contracts secured. As Rob mentioned, we won over AUD 1 billion in major construction and maintenance work with blue-chip customers in the energy sector, including Shell and Woodside.
A standout was a seven-year contract to keep providing maintenance services at Shell's Prelude FLNG facility off WA's Northwest Coast, an operation we've supported for nine years now. We also secured a major construction contract with Woodside for modifications to the Pluto LNG Train 1 facility to support the processing of Scarborough Gas. Demand from WA's iron ore sector remained strong. We picked up a solid stream of construction and maintenance work with long-term customers Rio Tinto, BHP, and Fortescue. For Rio Tinto, this included a number of maintenance contracts and extensions across WA. We also won a five-year master services agreement for marine structural integrity work at Cape Lambert, and we've secured two works packages already. To support this, we've invested in a 250 tonne jack-up barge.
Since 30 June, we've also been awarded a major construction contract for BHP's Jimblebar Train Loadout Replacement Project, plus several long-term maintenance and project services agreements with both BHP and Rio Tinto. During the year, we secured a multidisciplinary construction contract at BHP's Prominent Hill Operations Expansion Project. MONDIUM, our joint venture with Lycopodium, won a design and construct contract with Rio Tinto for a new sampling facility at Cape Lambert. Melchor secured a civil and structural concrete contract at the Perdaman urea plant near Dampier, with Albemarle providing heavy haulage services. Our renewable joint venture, Zenviron, strengthened its position with wins at the Lotus Creek Wind Farm in central Queensland and the Wooreen Battery Energy Storage System in the Latrobe Valley, Victoria. Overall, we are in a strong position moving forward with a healthy pipeline of committed work. Now let's talk about our people.
As Rob mentioned, we ended the year with over 9,000 people across our workforce, including subcontractors, up 23% from last year. This growth was driven by high levels of maintenance activity and a continued ramp-up in construction work. Around 330 graduates, undergraduates, apprentices, and trainees took part in our early careers programs. We were proud to be named in Australia's top 20 intern programs and top 20 graduate employers for 2025. Over 100 future leaders participated in our in-house leadership programs, and our registered training organization engaged with more than 2,800 tradespeople through over 6,000 training interactions. We also continue to embed the Respect@Monadelphous framework, rolling out Respect in Every Step, a leadership-driven initiative that reinforces the behaviors we expect from everyone. Let's move on to safety and well-being.
We remain committed to our goal of zero harm, following our key principle, "The safe way is the only way." Disappointingly, our 12-month total recordable injury frequency rate rose to 4.42 incidents per million hours worked. In response, we launched targeted campaigns to drive improvement to our safety performance. Pleasingly, our high potential incident frequency rate has remained at around historically low levels. We continue the delivery of our fatal risk program with focus on eliminating high-risk hazards such as pedestrian interaction with mobile plant, as well as monitoring high-risk tasks and verifying the effective application of our fatal risk controls. We also deployed a driver fatigue and distraction monitoring system across our fleet, advanced the rollout of pedestrian avoidance technology in telehandlers and forklifts, and added an overload override alert system to our Frank cranes.
Monadelphous, Melchor, and Albemarle again received industry recognition for safety and innovation, securing several awards and nominations. Now let's look at diversity, community, and environment. We began renewing our Stretch Reconciliation Action Plan, continuing to focus on Indigenous employment, training and development, and supporting Indigenous businesses. Our Indigenous workforce reached 3.5%, and we continued to build development opportunities through apprenticeships, traineeships, and the Indigenous Pathways program in partnership with Rio Tinto. Spend with Indigenous businesses rose 35% to more than AUD 27 million. We also consulted broadly to inform the renewal of our Gender Diversity and Inclusion Plan, and our talented women were recognized in the 2025 Women in Resources Awards. Our Community Grants program continued to grow across the Karratha, Darwin, and Bunbury regions, more than doubling the number of grants awarded to grassroots organizations.
On the environmental front, we continued progressing towards net zero, trialling electric utility vehicles, adding more hybrids and electric vehicles to our fleet. We installed solar power on a number of our workshop facilities, with more installations planned. We also continued to support our customers in meeting their own decarbonisation goals. Now on to operational highlights. Our Engineering Construction Division recorded revenue of AUD 925.3 million, a 30% increase, driven by strong activity across iron ore, energy, copper, lithium, and renewables. The division secured about AUD 890 million in new work, with another AUD 315 million won so far this financial year. In iron ore, we continue to provide construction services to BHP, Fortescue, and Rio Tinto, with work progressing at BHP's Car Dumper 3 renewal project and dewatering works at Ore Body 32.
We provided shutdown services at Rio Tinto's Western Range project and heavy lift services for Fortescue's Pilbara iron ore sites. We also grew our portfolio of multidisciplinary integrated construction projects, including the award post-year-end of a major contract for BHP's Jimblebar Train Loadout Replacement Project. Spanning earthworks and civils by Melchor, as well as structural, mechanical, piping, electrical, and instrumentation works, and off-site fabrication and procurement by Inteforge. In energy, we secured and commenced the major multidisciplinary contract for modifications at Woodside's Pluto LNG Train 1 and progressed work at Chevron's Jansz-Io Compression Project. At Talison's Greenbushes operation, we continued construction work, with Melchor delivering associated civil works. We also successfully completed construction of the wet plant at Liontown's Kathleen Valley project. Inteforge supplied structural steelwork and pipe racks for Iluka's Eneabba Rare Earths refinery project.
After year-end, they also secured a two-year extension with Origin Energy for the supply of packaged and modular equipment for Australia Pacific LNG, a relationship which has been in place since 2015. In Mongolia, we completed construction of surface infrastructure works at Oyu Tolgoi, maintaining a strong safety record throughout the project. I'll now hand over to Adam Cook, Executive General Manager of our Engineering Construction Division, to talk through some more divisional projects highlights. Thanks, Adam.
Thanks, Zoran, and good morning, everyone. Back in 2023, we were awarded a contract for early works and planning, as well as the civil, structural, mechanical, piping, electrical, and instrumentation works associated with BHP's Car Dumper 3 renewal project in Port Hedland. In executing this work over the past two years, we have seen peak numbers of 270 on-site and supported six major shutdowns. To deliver one of the most complex, high-impact shutdowns ever, we acquired the Robino, a 1,600 tonne Tadano crawler crane, one of the most powerful in Australia. The Robino was brought in to do what no other could: execute a precision lift of a 452.5 tonne rotary cell at a 37.5 m radius, making a historic milestone for our business. The result saved 38,000 labor hours, and the shutdown was completed 92 hours ahead of schedule, delivering an additional 5.85 million tonnes per annum throughput.
You can see a video of the Car Dumper 3 project on the screen now.
Here at Car Dumper 3, our team found smarter ways to work, introducing alternative solutions that cut hours, reduced schedule, and returned the asset to operation faster than expected. By securing a Robino crane that significantly reduced both time and risk, we proved our ability to deliver critical infrastructure reliably, safely, and with real value for the customer.
This project is based around the major shutdown that we're in at the moment. We've removed the two existing single cells, and we're replacing it with a single tandem rotary car dumper, which is a first of its kind for BHP. The project is pretty special because BHP have engaged the design themselves rather than going to a proprietary vendor. It's significant as we've purchased the largest crane in the fleet from Monadelphous. Using that to sort of provide time saving and cost saving for them is pretty significant for us.
The crane is in remembrance of John Robino, which is the key foundations of Monadelphous. It's a proud moment of us to actually do this and in honor of him and where Monadelphous started to where it is today.
Our challenges on this job have been the construction of a plant within an operating plant. Not only do we have the inherent risks of a construction project, but also the additional risks of moving plant.
So far, we've had four enabling shutdowns prior to the major shut, so we've managed to deliver each of them on time or early. Us being able to complete every shutdown as we wanted to and deliver that quality product without anyone getting hurt has been great. We're going to be lifting it as per the engineering design that's already been completed. From there, it'll be finalizing the works as happening in the cell vault, and when pending, we'll be lifting the cell up, locating it within the vault, and locking it in position for its final resting place. For us to get to this position where we're executing the shutdown, it's not just the site-based team that's allowed us to do it. It's the supporting herd that's allowed us to really get to the position where executing and succeeding.
As Zoran mentioned, we secured a significant volume of new work in the energy sector during the year, including a multidisciplinary construction contract for Woodside for modifications required to the Pluto Liquefied Natural Gas Train 1 facility in Karratha, WA. The scope includes provision of mechanical, electrical, instrumentation, and commissioning works for the facility and associated infrastructure, which will enable processing of gas from the Scarborough Energy project. As shown on the slide, Albemarle recently transported and installed the first module, a gas metering skid, weighing just under 200 tonnes. We transported it to site using self-propelled modular trailers, and it was installed with precision using a specialized hydraulic gantry system. We continue to strengthen our reputation for successful delivery with our key customer, Woodside, who have worked with us for more than 20 years.
During the year, we were awarded and progressed work on a multidisciplinary construction contract at BHP's Prominent Hill Operations Expansion Project, an underground mining operation and copper processing facility located in South Australia. The project involves the sinking of a 1,300 meter deep shaft and construction of a 6.5 metric tonne per annum materials handling system to transport ore from the underground mine to the surface coarser stockpile, supporting BHP's plans to expand the copper operations in the region by more than 50%. The integrated contract draws on the capability across the division, including structural mechanical piping, electrical and instrumentation, civil construction by Melchor, supply and fabrication of steelwork by Inteforge, and heavy lift engineering and craneage. The work positions us well within the copper and critical mineral sector, with a projected increase in opportunities to meet forecast demand.
I'd now like to hand back to Zoran to introduce the maintenance division highlights.
Thanks, Adam. Our Maintenance and Industrial Services Division delivered another record year, AUD 1.35 billion in annual revenue, driven by strong demand for maintenance and sustaining capital works. The division secured around AUD 1.4 billion in new work during the year, with another AUD 260 million secured since 1 July 2025. Maintenance activity in the energy sector remained high, supporting key customers, Shell, INPEX, and Woodside across onshore and offshore assets. We continued maintenance and turnaround services for Woodside, as well as securing a contract for the hookup and commissioning of Woodside's floating production unit in the Scarborough Gas Field. Maintenance and minor construction services continued at Shell's Prelude FLNG facility under the major long-term contract secured during the year. Post-year-end, we were awarded a services contract with Technip Energies for the hookup and commissioning of Shell's Crux platform, forming part of the backfill to Prelude.
At INPEX's Ichthys operations in Darwin, activity remained strong following turnarounds for trains one and two, along with ongoing work offshore. We continued decommissioning work for Petrobras on the Northern Endeavour floating production, storage, and offtake facility, which is now moved off-station. In iron ore, we experienced sustained demand and continued to provide fixed plant maintenance and sustaining capital works for Rio Tinto, fixed plant services and non-process infrastructure for Fortescue, and general maintenance services for BHP. We were awarded a three-year shutdown and maintenance contract at South 32's Worsley Alumina, and a new contract for minor project works, continuing our 20-year relationship there. I'll now hand over to Alastair Reid, Executive General Manager of our Maintenance and Industrial Services Division, for more on our maintenance highlights.
Thanks, Zoran, and good morning, everyone. We continued our long-standing maintenance support for the Ichthys Explorer, central processing facility, and the Ichthys Venture floating production, storage, and offloading facility in the Browse Basin of Western Australia. During the year, we supported the progression of the Phase 2B project, which included the booster compression module, transport, lift, and installation at the facility. The introduction of the module onto the facility will enable improved gas recovery and extend the field life with greater efficiency. After the successful module installation, our team focused on preparations for the offshore shutdown, with more than 60 km of electrical and instrumentation cables to be pulled and terminated, and the integration of the new heat exchanger and seawater lift pump. Our team has maintained an ongoing commitment to delivering quality outcomes at Ichthys LNG since the award of our first maintenance contract with INPEX back in 2017.
During the year, we were awarded a seven-year maintenance and construction services contract for Shell QGC's Curtis Island LNG operations in Gladstone, Queensland. This added brownfields project construction services to the existing scope of midstream maintenance and turnaround services, which we have been providing at QGC since 2013. Under the contract, we are responsible for facilities, maintenance, shutdown planning and execution, plants and equipment supply and management, along with warehouse labor. Our embedded teams help maintain a strong integrated culture with Shell QGC, further strengthening our position as a specialist LNG maintenance, shutdowns, and projects service provider. As Rob mentioned earlier, we continue to progress our markets and growth strategy related to the energy transition with the acquisition of Perth-based high-voltage electrical services business, High Energy Service, or HES.
HES provides specialist high-voltage electrical maintenance and testing, commissioning, and engineering, including to major resources companies throughout WA, and it adds to our existing electrical services capability and broadens our service offering to our existing customers. I'll now pass you back to Zoran to present a business update and the outlook. Thank you.
Thanks, Al. On 10 November, Monadelphous released a business update to the ASX, outlining that the company has experienced strong operating conditions and high activity levels across the business during the first four months of the current financial year. The momentum we saw in the last quarter of FY 2025 has continued, underpinned by the record amount of work secured during the 2025 financial year. Demand for our engineering construction services has remained strong, with more revenue coming from vertically integrated construction projects, especially those incorporating Melchor's civil capability and Inteforge's fabrication services. This really shows that our strategy to enhance our overall delivery capability and broaden our service offering is paying off. We've also seen increased major project activity in Zenviron and MONDIUM, along with a significant increase in demand from energy customers, especially in the brownfields developments and turnaround services.
Earlier this month, we finalized the acquisition of West Australian-based Kerman Contracting. Kerman specializes in designing and constructing non-process infrastructure, bulk storage, and material handling facilities for some of Australia's largest companies across resources, agriculture, and transport and port infrastructure. With a strong reputation built over more than 40 years as a family-owned business, Kerman is a great fit for us. A call-out to Chris Kerman, Chair of Kerman Contracting, representing the family here today. Welcome to the Mono's team, Chris. The acquisition expands our capabilities even further, allowing us to offer non-process infrastructure design and construction services in both existing and new markets. Kerman also brings a solid forward order book, including a major contract worth around AUD 170 million for Rio Tinto's Hope Downs 2 mine site in the Pilbara.
The project is for the detailed design and construction of non-process infrastructure to support mining fleet maintenance, servicing, and administration of site operations. As mentioned earlier, our committed pipeline remains robust, with more than AUD 570 million in new contracts secured since the start of the financial year and more expected in the coming months. We are currently forecasting revenue for the half-year ending 31st December 2025 to be around AUD 1.5 billion. While we expect activity to moderate in the second half, our full-year revenue is forecast to be around 20%-25% higher than last year. This slide shows current and forecast Australian market conditions for our business per Oxford Economics. The sectors we operate in all show strong forecasts for capital investment and operating expenditure in the coming years. Australia is undergoing a major energy transition, moving towards a decarbonised economy.
At the same time, the demand for energy is growing rapidly, partly impacted by the rise of artificial intelligence and the expansion of data centers. This represents a long-term opportunity that will play out over decades to come, which will require a significant level of investment. Monadelphous is well positioned to play a key role in this transition by leveraging our core capabilities and developing new services across four energy transition sectors shown on the slide. Right now, we are actively delivering work across critical minerals, renewable energy generation and storage, and the electrification of our customer operations. Last week, we entered into an agreement to acquire Australian Power Industry Partners, APIP, which you can see on the right-hand side of the slide. APIP is a small Queensland-based specialist provider of end-to-end high-voltage solutions, including design management, procurement, construction, and renewals of power transmission, distribution, and substation infrastructure.
This acquisition further expands our capability and supports our positioning in the transmission and distribution sector. We see this as the early phase of what is expected to be a strong long-term pipeline of opportunities. Now to the outlook. Long-term demand across the resources and energy markets remains resilient and is forecast to continue to stay robust, despite ongoing short to medium-term impacts from moderating global economic growth and elevated geopolitical uncertainty. Production levels across most commodities continue to underpin demand for sustaining capital works and maintenance services. While iron ore prices are expected to soften, production rates are likely to be maintained, supporting continued investment in new projects across Western Australia's iron ore sector, with a focus on efficiency to preserve its globally competitive position. The outlook for energy transition metals is strengthening following a period of improved pricing.
Over the medium to long term, mining and mineral processing development across the sector, including copper and critical minerals, is projected to increase, requiring substantial capital investment to meet growing demand. The energy sector continues to present significant opportunities, supported by a number of gas construction projects and sustained demand for maintenance services. Monadelphous remains well positioned to continue to support customers across a full asset life cycle, including late life and decommissioning support. Australia's net zero emissions objective and the decarbonisation initiatives of major customers continue to underpin a strong pipeline of near and long-term prospects, with increasing investment across generation, storage, and transmission infrastructure. Zenviron remains well positioned to secure further work in the wind farm and battery energy storage sectors and to capitalise on the continued growth in this market.
Looking ahead, Monadelphous remains focused on delivering quality of earnings through a selective approach to new work, collaborative customer relationships, high standards of execution, and a disciplined approach to the allocation of risk. Supported by a strong balance sheet, the company aims to drive long-term growth by continuing to expand its services, diversifying its markets, and pursuing targeted acquisition opportunities to build a more resilient business. In closing, I want to thank our entire Monadelphous team for their dedication and commitment, which are fundamental to our continued growth and success. I also extend my thanks to our customers, shareholders, and many other stakeholders for their ongoing trust and support. I'll now hand you back to Phil to complete the formal proceedings for the day.
Thank you, Zoran. As mentioned previously, if you're online and have a question, please select the Q&A icon and type your question in the text box. Once you've finished typing, press the send button. If you're online and want to ask a question verbally, please follow the instructions written below the broadcast on the online platform. For those of you in the room, I ask that all questions be held until after all the resolutions have been introduced. Today's resolutions will be voted on via a poll, which will be conducted after all the items of business have been tabled and discussed. I'll provide some guidance to the people in the room about the poll prior to commencing, and there will be assistance available to shareholders who have queries.
We'll tally the results of the poll at the end of the meeting and announce them on the ASX later today. As at the proxy close date, we'd received valid proxies representing around 61 million shares, or about 61% of the issued capital. We'll show the manner in which the proxies are to vote on the screen before each resolution is voted on. Where a proxy vote has been directed to the chair without a specific voting instruction, the chair will vote in favor of each resolution, except where a voting exclusion applies. The minutes of last year's AGM have been signed, and a copy is available for inspection. If you'd like to view the minutes, please come and have a chat to me after we finish the meeting.
We have five items of business to consider at today's meeting, and they were set out in the notice of AGM and the accompanying explanatory memorandum, which was released to the ASX and is available to the shareholders on our website. Unless anyone objects, I will take that notice as read. The 2025 annual report contains the financial statements of the company and the reports of the director and the auditor for the financial year ended 30 June 2025. No resolution is required. However, if shareholders would like to raise any questions or comments with either Pierre Dragh from EY or with the board regarding the financial statements and reports, for those online, please type your questions now, and for those in the room, we will address questions during the Q&A session. The meeting will now consider the formal items of business.
The first item of business is resolution one to re-elect, rather, a director, Ms. Sue Murphy, who retires by rotation in accordance with the company's constitution and being eligible offers herself for re-election. Sue was first appointed to the board in June 2019 as Deputy Chair and lead independent non-executive director of the board. She is also chair of the company's remuneration committee and a member of the audit and nomination committees. Sue is a civil engineer with 46 years of experience in the resources and infrastructure industries. The board, with the exception of Ms. Murphy who abstained, unanimously recommends that shareholders vote in favor of her re-election, noting the contribution Sue makes to the board, the valuable skills and experience she brings, her past performance, commitment, and dedication, and the current and future needs of the company.
The proxies received in relation to resolution one are displayed on the screen. As previously mentioned, we'll conduct the poll after all resolutions have been discussed. The second item of business is resolution two to re-elect a director, Ms. Helen Gillies, who retires by rotation in accordance with the company's constitution and being eligible offers herself for re-election. Now, Helen was first appointed to the board in September 2016 and is chair of the company's audit committee and a member of the nomination and remuneration committees. Helen is a lawyer with a strong background in risk, law, governance, and finance, as well as extensive experience in mergers and acquisitions. She has 29 years of experience in the construction and engineering services industry.
The board, with the exception of Ms. Gillies, who abstained, unanimously recommends that shareholders vote in favor of her re-election, noting the valuable contribution Helen makes to the board, her ongoing loyalty, skills, commitment, and dedication, and the current and future needs of the company. The proxies received in relation to resolution two are displayed on the screen. The third item of business is resolution three, the granting of performance rights to the Managing Director, Zoran Bebic, under the company's short-term incentive plan for the year ended 30 June 2025. It is proposed that Mr. Bebic or his nominee be issued with 18,647 performance rights under the Monadelphous Group Limited Combined Reward Plan for the year ended 30 June 2025. The key terms of the performance rights are contained in the notice of meeting.
Now, voting exclusions apply to this resolution, resolution three, as well as resolutions four and five, and the details thereof are set out in the notice of meeting. The Board, with the exception of Mr. Bebic who abstained, acknowledges the outstanding contribution Zoran continues to make to the company and therefore unanimously recommends shareholders vote in favor of this resolution. The proxies received in relation to resolution three are displayed on the screen. The fourth item of business is resolution four, granting of performance rights to the Managing Director, Zoran Bebic, under the company's long-term incentive plan for 2025. It is proposed that Mr. Bebic or his nominee be issued with 29,538 performance rights under the Monadelphous Group Limited Long-Term Senior Leadership Performance Reward Plan for 2025. The key terms of the performance rights are contained in the notice of meeting.
The board, with the exception of Mr. Bebic who abstained, unanimously recommends shareholders vote in favor of this resolution. The proxies received in relation to this resolution are displayed on the screen. The last item of business for today is resolution five, which is the adoption of the remuneration report, which is contained in the director's report to shareholders. The vote on resolution five is advisory only and will not bind the directors of the company. However, the board will take the outcome of the vote into consideration when reviewing remuneration practices and policies. The board recommends that shareholders vote in favor of the adoption of the remuneration report. The proxies received in relation to resolution five are shown on the screen. Before we move to the poll, and as mentioned earlier, we'll now open up the floor in the room for questions.
If you have something you wish to ask, please raise your hand, and one of our attendants will bring a microphone to you. For the benefit of those listening online, we ask that you please speak into the microphone so that everyone can hear your question clearly. As mentioned previously, if you're online and have a question, please select the Q&A icon and type your question. Once you've finished typing, please hit the send button. I'll open the floor to questions. Mr. Corrick from the ASA.
Thanks. You'll get a hold of that. Thanks. Thanks, Donna. My question's directed to the chair. First of all, thank you very much, Rob and Kristy Glasgow, one of the company secretaries, for making time to meet me about three weeks ago. My name's Jeff Corrick, and I'm representing 34 proxies on behalf of the Australian Shareholders Association. My question is prompted by the re-election of Sue Murphy. Although we support the resolution, we are campaigning for an improved board skills matrix, preferably reported in the annual report. Some material at present is in the corporate governance statement, and we feel that it requires a fair amount of imagination on behalf of shareholders to interpret the roles and previous jobs that directors have had and turn that into what the skills are that are required.
Similarly, in the notice of motion, notice of the meeting, the descriptions are all about the roles they've had but do not really mention the skills. People who have directorial ambitions are generally not shy about promoting their skills. Ms. Murphy, in particular, is a case in point listing more than 20 skills in her LinkedIn entry, but I am sure not all shareholders would use LinkedIn to look this up. There is no problem in recognizing that skills are not covered. The important point is that the deficit is recognized. Usually, these can be filled by buying in expertise. Last year, we talked about the approach to information technology security. Monadelphous covers that quite well, it seems to me, in either employing expertise or buying in advice when required. Similarly, we heard mention of Ms. Gillies having expertise in law and the association, I guess, with acquisitions.
Also, the Institute of Company Directors gives a good example of what a skills matrix should look like with each director's skills recorded. My question is, should we expect more detail in reporting director skills in the future?
As you say, Jeff, there is detail around individual directors' bios in their corporate governance statement. We do give a matrix of skills and the number of directors with those skills in the annual report, which I think we would think is sufficient. However, I will take your comments on board, and we'll consider that for our next annual report.
Thank you. Any further questions in the room?
It's a few years since I've been, but congratulations to the board and to the executive on the performance, particularly in the last six months. The share price performance has been exponential and probably reminds me a bit of the mining boom going back a number of years ago. I've been a reasonably long-term shareholder. I guess my questions relate to one is the skills matrix, but I'm very concerned about the risk factors which have occurred in the last 12 months. I really would like some more detail about when and how these occurred as far as injury in the workplace, because obviously it's featured into the skills matrix, which we don't really know who or what actually has what skills. We really need to sort of drill down a bit in the workplace injuries. How did they happen?
Obviously, there's been replication actions put in place since, but at the time, what did happen? How did it happen? What are the consequences on the contract values? Now, would you like some questions on REM in addition?
Can I answer that question first, Paul? In terms of both Rob and I acknowledge that our safety performance, particularly if you look at our key lagging indicator, our total recordable injury frequency rate, is certainly not at the level that we expect. It was 4.42 for the year. We saw probably we have a 25%-30% deterioration. What that measure captures is a workplace injury that requires an employee to seek medical treatment or has some sort of restricted work or it's a restricted work injury. Now, what we do do, we do a lot of proactive work in advance to ensure that our team is complying with our expectations around safety.
When an incident or an injury does occur, we have a very detailed review process to understand what the contributing factors to the injury were, and we make sure that we share that across the business to try and eliminate injuries going forward. That is in the injury space. The other point I did touch on or made in my speech was around our high potential injury frequency rate, which is more important and is, in my opinion, the key measure in the business. They are the incidents that occur that have the potential to cause serious harm or fatality across the business. The positive in terms of our overall HSE performance for the year was that our high potential injury frequency rate is tracking at a consistently low level. Whilst we have injured, absolutely injured employees, they have been lower level injuries.
A lot of those injuries I'd put in the category, I think 50% of our injuries have been hand or finger related injuries that have required sutures or small fractures.
A couple of other questions. Now, I might move to the resolutions three and four. If I look at pages nine and ten of the notice of meeting, firstly, I notice there's approximately 230 employees who are eligible for the STI, which I find an interesting number too, quite high, but for a growing business, probably as long as it's results generated, I can probably accept that. However, next paragraph down, second paragraph on the bottom of page nine, we seem to have a bit of a misconstruction between what's written here and what is in item H on page ten. I would like to think there that there's this ambiguity in the view of the performance rights and also the share price, strike price. It's actually reconciled, and the two lots of numbers are actually identical, not different.
Can someone please explain what has happened or what is the interpretation, please?
Yeah, I can explain it, and it is reconciled, and I'm comfortable those numbers are correct. There is a slight difference.
Yes, there is. There is because they're actually talking about two slightly different concepts. One is the award of the short-term incentive that was made to the Managing Director. The second one then is the valuation of that award as it goes through the accounts. The difference between those two numbers is because of the fact that there is a proportion of that that's issued in equity, and it vests over time. The difference is that Mr. Bebic will lose out on some dividends because all of those shares are not his from day one.
Okay. For the future, and I think I spoke to one of the staff members who probably writes the annual report. I'm not sure who writes the NOM, knows the meeting, but can this be tightened up a bit in the future, please? Whoever writes it.
The other thing which I've struggled to find in the REM report is, can we get a clear definition of what LTI rights and what STI rights vested in the previous financial year, please?
Yeah, we recognize that to meet our compliance obligations, it is a lengthy report, but all of the required detail in there is necessary. Unfortunately, through no fault of our own, it is a lengthy report, and it is not necessarily the easiest to read. We have made big efforts this year to try and simplify it again, but it is the report that is required to meet our compliance obligations.
Okay, Phil. Thank you. This is my last point. Phil, can you actually look into this a bit more? I'm happy to have words with you after the AGM, but probably a little bit more clarity and less ambiguity. Because most company reports do actually have quite clearly defined rights or options which are vested, be they LTI, STI, in the previous 12 months.
Yeah, I'm comfortable after this. Paul will sit down, and I'll show you where that information is contained. Okay, thank you for those questions. Are there any further questions in the room? Okay, moving now to questions from our shareholders listening online. I'll read to introduce the online questions on behalf of the shareholder who posed the question.
Thanks, Phil. We do have a small number of questions online. The first one is from Steven Mayne, and he actually starts with some positives. He comments about the high-quality hybrid AGM, well done, so it avoids people from the East Coast having to travel to the most isolated city in the country or in the world. He also comments about, well done, disclosing the proxy position to the ASX, showing no material protest votes once again. The first question, however, relates to, would we consider disclosure of the poll results by both shares and shareholders? So you can see the sentiment of the retail shareholders.
Yep, thank you for that question. Yes, we did consider it this year. When we went in to analyze the actual voting, there is a substantial amount of shareholders' shares that are under custodian companies, and they vote as one. It is very difficult, which is very difficult for us to actually get the next level of detail down. When we had a look at it, if we had posted that information, we believe it would have been misleading and not a fair representation. The other factor that we thought of or that we considered was that we had probably all resolutions where averaged about 97% for, so we were comfortable on that basis to stick with the way we've done it historically. We will consider that going forward if we can get a better and deeper level of information from custodian companies.
Thanks, Phil. The next question is also from Steven Mayne, and it relates to the impact of AI, in particular on staff. Do we see that staff numbers falling over the next 12 months due to the rapid rollout of AI? The second part of the question is, which parts of our business and operations are the most prospective for AI productivity gains, and how are you embracing those opportunities?
I think there's a few questions in there. I think that is a challenge that every company is facing at the moment to understand how artificial intelligence is going to impact the world and the way we operate. To be honest with you, the timeframe of 12 months, no, I don't think it is going to materially impact our business at all. The way that we are at the moment thinking about artificial intelligence and its use within our business, and we actually are utilising artificial intelligence within the business. We are trialling some other bits of artificial intelligence, and we've got a good view on what else is out there as opportunities that we can look at. The biggest benefits that we have noted and already implemented within our business relate to improving the or reducing the safety risk.
We have implemented, as Zara mentioned, and I think Rob might have mentioned it as well during their presentations, we've implemented a number of bits of technology using artificial intelligence that will help us to reduce safety risk, which is obviously the key priority for our business. We are also looking at it to improve productivity across the business. It's a tool similar to any other bits of software that will enable our people to perform their functions in a more productive manner and improve the quality of their outputs, bearing in mind that there are risks attached with artificial intelligence as well. We have implemented a number of bits of artificial intelligence through the business, and we're already seeing some real productivity gains coming through from that.
Thank you, Phil. The last question we have from Mr. Steven Mayne is for Zoran. The question relates to the extent and breadth of engagement you have with analysts, brokers, fund managers, and institutional investors after each of the six monthly results to the ASX. He'd like some details on that, please, and how this compares or what we do for the retail investors. The last part of that question is, would we consider running a big end of town investor day as many other major companies do, and would we include retail investors?
If I think about our post our full year results presentation and our half year presentation, Phil and I actively engage in an investor roadshow, predominantly on the East Coast, but we certainly meet people here in Perth. That consists of, I think if I reflect on the full year, that probably consists of 50 engagements with institutional investors, brokers, and analysts between us. Likewise, a similar number in the half year. Outside of that, we regularly interact and meet with key stakeholders outside of that. In fact, I think I have three sessions this afternoon. In relation to, what was the last part of the question in terms of a bigger investor day?
Happy to take that comment or feedback on board and consider it in terms of the way we facilitate our investor engagements going forward.
I might just add to that. We do take the time and invest effort into supporting our retail shareholders as well. Events like this, the half year and the full year presentations are posted on our website as well. Retail shareholders have access to the same webcasts and transcripts that the big institutionals do as well. I think the other thing I'd note as well is that we're committed that every phone call we receive from a shareholder, either Kristy or myself or Zoran will respond to. Yes, Mr. Corrick.
Jeff Corrick, representing the Australian shareholders again. Just if I may comment that I am very happy with the reporting that you do. The release of the half yearly and yearly results, what do you call it?
Cost.
Online conference. I understand that I could ask questions if I wanted to. I think anybody can. I think that's a very excellent thing that Monadelphous does.
Thank you very much. Okay. No more questions? Okay. Spoke too soon. Mr. Fanning.
Thank you. These are a couple of questions related to the financial statements. I commend Monadelphous on the acquisitions of High Energy Service and Kerman Contracting. My query on behalf of shareholders would be what contribution could they make in the coming FY 2026 year if that is known? Also, the third tangent is what would be an acceptable EBITDA margin which has risen for FY 2025? Could or should it be higher than what it is? Perhaps going back in history. Rob, you would have a good insight into EBITDA margin from many years ago too. Can I throw those three questions to either Zoran, Rob, or to Phil?
Okay, I'll have a go at the question. In terms of the contribution from High Energy Service and Kerman Contracting, we've got to work through an integration and a transition process, but we certainly expect both businesses to be earnings accretive going forward. I would expect that to occur in the following or in the current financial year. In terms of EBITDA margin, I mean, the way we set our longer-term growth targets, we've absolutely got stretch in there in the sense that we're looking to continue to improve the EBITDA margin going forward. Now, that's simple to say and hard to achieve. The reality is, you quite rightly pointed out, Paul, if you go back a long period of time in the early 2000s, our EBITDA margin was stronger than it certainly is now.
If you look at the improvement trajectory or the trajectory of the EBITDA over the last three or four years, it's continued to improve. I'd like to think that the team will continue to work hard to drive further improvement in the EBITDA margin. Where it can get to, I'm not sure, but we certainly have an aspiration to continue to grow the margin.
Thank you. Do you want to add anything to that?
Yeah, look, the only thing I would add is the comparison we're making or drawing from, I don't know, when it was 14 years ago during the boom. Our business was very different in those days. It was very heavily construction-oriented and very little services. Now, our services business is like 60% of our business, which, as recurring revenue, you wouldn't necessarily expect the margin to be as high as it can be if you're performing really well with just construction revenue.
Okay, interesting. Thank you. All my questions for today.
Okay, we'll now conduct the poll. For those shareholders, representatives of shareholders, and proxy holders attending online, please ensure that you've cast your vote on all resolutions using the online voting button. We'll now conduct the poll for the shareholders in the room. At the time of registration, those entitled to vote, being shareholders, representatives of shareholders, and proxy holders, were given green admission cards. Each shareholder present, either in person or by proxy, has one vote per resolution for every share owned. Rod Somes from Computershare has agreed to act as returning officer for the poll. If you have any questions during the polling process, please raise your hand and a Computershare representative will come over and assist you. If there's anyone who believes they're entitled to vote but is not registered to vote, can you please raise your hand? Okay.
If you're here in more than one capacity, for example, on your own behalf and as a proxy for another shareholder, you will have been issued with as many green admission cards as you have separate capacities. On the reverse side of your green admission card is your voting paper and instructions. If you're a proxy holder and have only directed votes, as shown on the summary of votes attached to your admission card, all you need to do is print your name and sign the voting paper, then lodge it in the ballot box. In respect of any open votes a proxy holder may be entitled to cast, you need to mark a box beside the resolution to indicate how you wish to cast your open votes. Shareholders also need to mark a box beside the resolution to indicate how you wish to cast your votes.
Please ensure you print your name where indicated and sign the voting paper. When you've finished filling in your voting paper, please lodge it in one of the ballot boxes being circulated to ensure your votes are counted. If you need any help, please raise your hand. I'll close the voting system in a few minutes. Please ensure you've cast your vote on all resolutions. I'll now pause to allow everybody time to finalize your votes. Rod, just. Does anyone need any more time to complete their voting paper or lodge their voting paper? Okay. On that basis, I now declare the poll closed. The results of the poll will now be tallied and we'll publish it on the ASX later today. Is there any other business today that can be properly brought to the meeting around the management of the company? Okay.
If there's no other business, I declare this meeting closed. I would like to take this opportunity on behalf of the board and everybody at Monadelphous to thank you for your attendance today and for your continued support of our company. That ends today's formalities. For those of you online, thank you for joining us. For those of you in the room, we'd like to invite you to come and share in some light refreshments in the foyer. Thank you.