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OTOC Limited Wins $3M Roy Hill Services Contract

OTOC Limited (ASX:OTC) has been awarded a $3 million contract for Mine Process Plant (Civil Works) in-ground services for the Roy Hill iron ore project in the Pilbara.

The company will provide the services to NRW, which is a sub-contractor to Samsung C&T for construction and earthworks undertaken at Roy Hill.

"This contract provides OTOC with exposure to the development of this very large and globally significant iron ore project," chief executive officer Simon Thomas said.

"We believe the quality of our work and on-the-ground presence at Roy Hill will result in significant opportunities to increase our services to NRW and expand the range of services we can deliver to assist in the development of Roy Hill."

This is notable given the slowdown in the resources construction activity.

OTOC

The Roy Hill services contract adds to the contracts the company has won in the current financial year.

This includes an additional $16.2 million worth of new work for the Nauru Processing Centre and contracts totalling $4.3 million to carry out survey services and aerial acquisition works.

The Nauru win, which adds to the initial $28.7 million contract, sets the stage for the company to secure ongoing work at the centre as well as other government infrastructure opportunities.

OTOC had also in December 2013 secured $8.7 million in finance facilities from Commonwealth Bank (ASX: CBA) to undertake new and larger projects, and to fund potential growth opportunities.

The company had in the half-year ended 31 December 2013, recording a 148% increase in profit from operating activities to $4.8 million.

Revenue for the period was also up 45% from the previous corresponding quarter to $73.8 million while net profit after tax increased 264% to $2.7 million.

Notably, the company had previously forecast a continued revenue trend and consistency of financial performance for the balance of the 2014 financial year ending 30 June 2014.

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