CARDNO RESULT HAMMERED BY WRITEDOWNS
Written on the 18 August 2015
WRITEDOWNS have pushed Cardno Limited (ASX:CDD) deep into the red, with the infrastructure firm posting a full year loss of $145.2 million.
Impairment charges of $195.5 million relating to the divestment of its Ecuador business impacted the result, down from a net profit of $78.1 million in the previous year.
Net operating profit after tax of $50.3 million was at the top end of Cardno's forecast, while gross revenue increased 9 per cent to $1.427 billion.
Cardno chairman John Marlay says performance was adversely impacted by challenging economic conditions in key markets.
"Despite external challenges, we are not satisfied with our results and are continuing to undertake significant action to improve overall business performance and profitability," Marlay says.
Several large projects in the Americas have wrapped up, while oil prices and reduced US government expenditure curbed performance in the region.
Operations in the Asia Pacific region reflect a decline in the resources sector and demand for mining services. Delays and cancellations in a number of publicly-funded infrastructure programs also contributed to the result.
Newly appointed Cardno CEO and managing director Richard Wankmuller says despite difficult market conditions contributing to a decline in organic revenue, the group maintains a strong financial position in FY16.
"Asia Pacific performance will remain subdued for the remainder of 2015 with infrastructure work in New South Wales a notable exception," Wankmuller says.
"The Americas region is well positioned with backlog, however conversion of this work into profitable fee generating revenue will be a key success factor.
"The recent strengthening of the US dollar against the Australian dollar provides a positive impact to group results and a partial hedge against the impacts of oil price volatility."
He says the board is focused on improving business performance, including building capital and prioritising profitability over revenue growth.
A string of successful project bids in Australia is expected to bolster revenue expectations, with 85 per cent of Cardno's backlog to be delivered this financial year.
A fully franked dividend of 7c will be paid on October 2.