Metallurgical testing company Ammtec has revised down its full year profit guidance from $8.7 million to $7 million due to declining demand for its engineering services.
The announcement is below:
Due to declining demand for certain services Ammtec has downgraded its FY09 guidance released in January.
Ammtec's core metallurgical and mineral testing business remains steady but demand for specialised engineering services from newly acquired subsidiary Marc Technologies has declined. Marc is expected to achieve revenues similar to FY08, but the global financial crisis has placed pressure on profit margins resulting in a decline in NPAT.
Marc has also undergone some recent restructuring with the appointment of a new general manager and the move to larger, better equipped premises. Marc has experienced an increase in enquiry levels and the order book is strong and growing but this will not impact until the second half of FY10. Ammtec still remains profitable and is predicting NPAT of $7million which is in line with the actual results for FY08, but lower than the $8.7million forecast in January this year.
Managing Director, Rod Smith, commented that he was "pleased that the results for the core business have held up so well given the tough economic times and the future looks positive. The volume of gold and iron ore testwork has increased from last year and we are now conducting laboratory testwork on uranium."
"Also, recent expansion to automated mineralogy equipment at Balcatta has enabled Ammtec to diversify into oil and gas mineralogy which is also proving positive."
In April the Company paid a fully franked interim dividend of 6 cents per share and the Board will make a decision on the final dividend when the audited results are released.
