A leading mining and energy contractor tips long-term strength in processing energy transition minerals but warns of barriers to overhauling the nation's power supply.
Engineering group Monadelphous on Tuesday reported a 16.2 per cent rise in net profit to $62.2 million for the year to June 30 as revenue rose 11 per cent to $2.03 billion.
Managing director Zoran Bebic said prospects remained positive in resources and energy despite commodity price volatility.
Decarbonisation projects were making up an increasing share of capital expenditure forecasts, with electrification, energy storage and hydrogen works beginning to proceed to investment, he said.
Prospects in the energy sector remain positive, with several new gas construction projects under way or in development and strong ongoing demand for maintenance services, according to the company.
The increasing need for decommissioning oil and gas assets was also expected to create opportunities over the coming decade.
But chair Robert Velletri warned that efforts to decarbonise the power sector have been affected by network constraints, delayed planning approvals and supply chain pressures.
"Additionally, ongoing investment in electricity transmission, infrastructure and grid stability will be essential to support the increased introduction of renewable energy generation," he said.
Monadelphous has been awarded more than $1.1 billion in new contracts since the beginning of the 2025 financial year in iron ore, lithium, rare earths, gas and renewable energy.
Reducing the current year's construction work in hand by $200 million, American lithium giant Albemarle axed jobs and terminated a contract for the expansion of the Kemerton plant in Western Australia's southwest in August.
Mr Velletri said commodity price volatility over the past year has resulted in reduced production, mothballed operations and deferred spending, particularly in lithium and nickel.
"Despite this uncertainty, the level of mining and mineral processing development in the energy transition metals sector is projected to remain high over the long term," he said.
"This includes the copper sector, which will require significant capital investment to address forecast demand shortfalls."
A long-term contractor to Woodside, Inpex, Shell and Santos, the group also provides engineering services to iron ore giants BHP, Rio Tinto and Fortescue.
With Australia continuing to face a shortage of skilled labour, Mr Velletri said there would be a "selective and targeted" approach to taking on new work as market opportunities remained strong and further contract awards were expected in coming months.
The acquisitive group said a strong balance sheet provided the financial capacity to take advantage of strategic investment opportunities.
The board increased the fully franked final dividend to 33 cents from 25 cents.
