MIXED RESULTS CURB WATPAC'S PROFIT

Written on the 24 February 2015

MIXED RESULTS CURB WATPAC'S PROFIT

WEAKER commodity prices have hampered Watpac Limited's (ASX:WTP) half year profit, despite strong performance from its contracting businesses.

The construction and mining services company reported a net profit after tax of $6.2 million for the first half of FY15, compared to $7.4 million in the previous period.

An increase in contracting revenue to $450.8 million was offset by a decline in mining revenue of $143.7 million, in comparison to $147.7 million in the first half of FY14.

Watpac managing director Martin Monro (pictured) says the results are a reflection of the group's long term strategy amid mixed operating environments.

"The strength of the construction industry has seen Watpac's contracting businesses perform extremely well over the past six months," Monro says.

"This markedly improved financial performance is reflective of our national approach to construction activities, combined with strategies we have put in place to further strengthen our balance sheet and build on our client relationship capabilities.

"Weaker commodity prices have hampered the mining industry which has resulted in reduced profitability for all operators in the sector."

Looking ahead, Monro says the company will deliver solid growth with more than $250 million in new contracts and extensions in the pipeline.

The total forward order book is valued at $1.2 billion, including the $24 million Ronald McDonald House project in South Brisbane.

"With the strength in contracting, and stabilising results in mining and civil we remain confident in our guidance of an underlying net profit result broadly in line with last year, and a further strengthening in our balance sheet position," Monro says.

Watpac has $162 million in cash and term deposits, while debt has been reduced to $56 million.

WTP will pay an interim unfranked dividend of two cents per unit on March 27.


Latest News

ASF UNVEILS TRAFFIC PLANS FOR THE SPIT

A SECOND bridge over the Nerang River is the centrepiece of the ASF Consortium's plan to improve traffic flow ...

BHP AND VALE EDGE CLOSER TO $47.5 BILLION SAMARCO DAM DISASTER SETTLEMENT

BHP Billiton (ASX: BHP) and Brazilian mining company Vale have entered into a preliminary agreement with Brazilian fe...

BLK SPORT FOUNDER TYRON BRANT REMAINS CEO UNDER NEW OWNERS

BLK Sport has been purchased from receivers McGrathNicol by a private consortium composed of a TimorLeste-based oi...

CARSALES CEO RETIRES AS NEW COMPETITOR COX FINALISES MERGER

CARSALES will have a new CEO as it takes on a fresh challenger to its crown as the dominant online car sales portal i...

Related News

CARSALES CEO RETIRES AS NEW COMPETITOR COX FINALISES MERGER

CARSALES will have a new CEO as it takes on a fresh challenger to its crown as the dominant online car sales portal i...

BUSINESS CONFIDENCE AT A SIX-YEAR HIGH

SMALL and medium businesses have entered 2017 with their confidence at a six-year high, building on strong gains m...

CONSUMERS PESSIMISTIC ENTERING 2017

CONSUMER confidence remains at its weakest point since April 2016, according to the latest Westpac Melbourne Institut...

RISE OF STARTUP SUPPORT PROGRAMS NOT AS ROSY AT IT SEEMS

ENTREPRENEURIAL cultivation companies in Australia are appearing quickly, but questions have been raised about whe...

Contact us

Email News Update Sign Up Contact Details
Subscriptions

PO Box 2087
Brisbane QLD 4001

LoginTell a FriendSign Up to Newsletter