Booming result

A BOOMING PERFORMANCE

Boom Logistics recently provided company results from the 2021 financial year. Announcing a net profit, after tax of $1.2 million, managing director, Tony Spassopoulos spoke to Cranes and Lifting about the company’s performance.

DESPITE THE OBVIOUS IMPACTS RELATING

to COVID, the financial year 2021 provided a solid result for the company. Boom Logistics have adjusted to new practices including border permits and travel restrictions and we work in a new environment of social distancing with stringent safety processes in place. This has led the implementation of new protocols, said Tony Spassopoulos, Boom Logistics managing director.

“The impact of current border restrictions will create some challenges in the months ahead. Hard border closures are placing restrictions on labour as people are locked into their locations, and this is a major area we are working through,” he said.

Revenue declined 6.6 per cent to $173.3 million reflecting the effects of pandemic-related supply chain constraints and deferred projects and shutdowns. With substantial new projects secured, net capital expenditure was $14.7 million as the company invested in new assets to service these projects, strengthening its fleet of cranes and travel towers. Asset sales during the year were $4.8 million.

“By reducing overheads and costs, our first focus was to tighten up the organisation. We then looked at all our revenue streams and focused on the customer and service delivery. Some customers reduced their scope in terms of shutdowns and projects which created delays with projects rescheduled for later in 2021/22,” said Spassopoulos.

Spassopoulos elaborates further on activities within the various states and market competition.

“We had a solid year in both Queensland and Western Australia regions. We have renewed contracts, in particular with Anglo American and FQM

Boom Logistics managing director, Tony Spassopoulos.

Nickel, which is proving to be positive for the business.

“We also completed shutdowns with major customers in Queensland at BMA and Curragh and in WA at Boddington Gold and Alcoa, which provided solid work and consistency. We are also expanding back into the north-west where we have a depot in Port Hedland. There is strong potential for growth in this region,” he said

“New South Wales, and the Hunter Valley region in particular, is a challenging and competitive market with high labour costs tightening margins.

Spassopoulos goes on to discuss the planned infrastructure build across the nation and how Boom Logistics is placed to capitalise on these opportunities.

“We have a strong pipeline and targeting specific projects, where we believe we have a strong value proposition for customers. Our focus is on the civil and engineering sector and bridge building for example. We are also focused on the rail work which is coming online. And this is across Australia, not just one specific state or region,” he said.

Another area of growth is around the Tunnel Boring Machines (TBMs) being deployed on major infrastructure projects.

“We are heavily involved in the Snowy Hydro 2.0 project which we classify as an infrastructure project. On this significant project, we are building three TBMs. We’ve finished the first of these and we are now on to the second.

“We have a number of machines onsite which are a combination of crawlers and supporting hydraulic cranes. The Snowy Hydro 2.0 has been a good project for us and for our major customer operating there,” he said.

The renewable energy sector has been a key focus for Boom Logistics for some time.

“We have certainly been strong in the renewable energy sector. Our strategy has been to diversify into growth sectors, in

particular windfarms.

“In terms of providing lifts for our customers, we are well established in this sector. In the last couple of years, we have expanded our services to manage full contracts including total install packages. Our services include lifting, mechanical and electrical engineering with full construction capabilities, on site from the ground up.

“We see a strong pipeline ahead with over 2000 plus wind tower turbines to be built in Australia over the next three years. With the existing 3000 plus towers already installed, we see strong growth in the renewable energy industry, and in particular the wind farm maintenance market,” he said.

Investment for growth is the focus for Boom Logistics. Spassopoulos discusses the types of equipment the business has invested in and why.

“This year, our total business utilisation has grown from 71 per cent to 77 per cent. This includes both cranes and travel towers. We have experienced uplift of utilisation in our crane business which is running at around 81 per cent. In particular, the smaller assets in the fleet, which include Frannas, have a high utilisation rate at 92 per cent. This why we have invested in more Frannas with 22t, 25t and 40t capacities.

“We have also placed orders for mid-size cranes in the 70t to 150t capacity range. The main reason for this investment relates to forthcoming projects. We have a major smelter shut down project planned for BHP Olympic Dam and we have spent capital on assets for this particular project. Once this shut down is complete, those assets will be deployed into other growth markets,” he said.

Spassopoulos discusses the strategies Boom Logistics has adopted to emphasise the importance of safety throughout the organisation.

“We had our best Total Recordable Injury Frequency Rate (TRIFR) in a decade and, our lost time injuries were at zero last year.

“We have improved our process and awareness around safety. A key strategy was to generate a safety culture with management leading the teams in the field. We have also focused on our “Safe Act Observations” which has meant our management, supervisors and engineers getting out and in the field with our crews to assess risk management and discuss safety first-hand. That has been our focus and we have had a very positive result. We know there is more work ahead and we have a goal of zero harm which will continue to be our focus,” he said.

“We have also focused on our “Safe Start Mondays” initiative. Every week, we raise a particular safety matter or theme within the organisation. This might be, changing RGBY tagging, risk assessments, pre starts or PPE requirements in certain operations.

“This gives our Toolbox sessions a purpose for our crews at each of the locations. We are proud of the initiative, and we haven’t missed a “Safe Start Monday” for a number of years. It is a popular and visible way of communicating the importance of safety within the organisation. Also, if any crew member feels they can’t control a particular risk, they have the authority to stop, reassess the situation and work through any safety concerns they may have,” said Spassopoulos.

There will be challenges, but Spassopoulos is positive about the next 12 months for Boom Logistics.

“FY21 has been a solid year for Boom Logistics, and it clearly indicates we are on the right track. We are also forecasting further growth in FY22, despite the ongoing challenges with COVID which include labour shortages and border restrictions.

There may also be delays in projects or supply chain restrictions but taking all of this into consideration, we are confident in our solid portfolio of work.

“We are diversifying into growth sectors, including renewables and wind farms in particular. The other area of focus is our Travel Tower business which operates in the high voltage, transmission, energy and interconnector sectors. We see this business as being a really strong prospect going forward,” he said.

“Our large travel towers have been consistent with projects up in the Pilbara and we see more activity in the high voltage and interconnector sector. We see growth for the Travel Tower business in the telecommunications sector including the 5G and NBN wireless roll outs in regional areas. With this in mind, we have placed an order for eight travel towers for the coming period. These are large towers ranging from 56m to 70m towers.

“We have a solid portfolio of work booked in the first half of FY22.

“With our pipeline across mining maintenance, the renewable energy sector and the infrastructure construction program, we anticipate the business to keep growing and there are certainly good opportunities ahead for Boom,” said Spassopoulos.

Boom Logistics is heavily involved in the Snowy Hydro 2.0 project.