Perth-based engineering and fabrication company AusGroup has foreshadowed an unspecified fourth-quarter loss as a result of writing-down the goodwill in its Singapore subsidiary Cactus Engineering & Trading.
Perth-based engineering and fabrication company AusGroup has foreshadowed an unspecified fourth-quarter loss as a result of writing-down the goodwill in its Singapore subsidiary Cactus Engineering & Trading.
AusGroup, which is listed on the Singapore stock exchange, has also announced new orders worth $37 million, with Rio Tinto and Worsley Alumina, taking its order book to $362 million.
The comany said it is expected to be profitable for the full year ended 30 June 2010.
Two announcements are pasted below:
Profit guidance for fourth quarter
The Board of Directors of AusGroup Limited (the 'Company' and together with its subsidiaries, the 'Group') deems it appropriate to announce that the Group is expected to report a loss for the fourth quarter ended 30 June 2010.
The fourth quarter result is expected to be a loss due to an impairment charge recorded for a subsidiary, Cactus Engineering & Trading Pte Ltd (Cactus). Since the previous review, Cactus has experienced further declines in revenue and margins and business has remained challenging due to slow demand for the Singapore based fabrication and machining services from the upstream oil and gas sector. After careful review and evaluation, the Directors are of the view that it is appropriate to make certain impairment adjustment on the goodwill associated with the acquisition of Cactus.
This impairment loss will be reflected as an expense in the income statement, thereby contributing to a loss for the fourth quarter ended 30 June 2010. The impairment loss is a non-cash flow item and is not expected to have any adverse impact on the operations of the Group.
The Group is expected to be profitable for the full year ended 30 June 2010.
Further details on the full year results of the Group will be disclosed when the Group releases its unaudited consolidated financial results for FY 2010 before the end of August 2010.
AusGroup awarded new contracts
AusGroup Limited is pleased to announce the award of several contracts across the AusGroup business including fabrication, construction and scaffolding services projects.
The first contract is the award of a AU$25 million contract by Rio Tinto. AusGroup's subsidiary, AGC Industries Pty Ltd, was awarded the contract for the Cape Lambert Port A Sustaining Works Project comprises of the implementation of a replacement iron ore product screen building located at Cape Lambert in North Western Australia. The scope of work includes the fabrication and construction of a new screen building, feed and discharge conveyors and associated transfer station consisting of 840 tonne of structural steel, platework, conveyor systems and installation of 150 tonnes of client supplied mechanical equipment. Completion is expected in May 2011.
AusGroup also secured a AU$12 million contract for scaffolding installation services for BHP Billiton Worsley Alumina Pty Ltd. The contract was awarded to MAS Australasia Pty Ltd, a subsidiary of AusGroup Limited, who will undertake the provision of scaffolding installation services to support construction works for BHP Billiton Worsley's Efficiency and Growth Project, located in South Western Australia. Completion is scheduled for August 2011.
AusGroup's Managing Director John Sheridan said "We are delighted to secure these contracts and look forward to delivering these projects to the complete satisfaction of our clients."
With these new major awards and other various project awards, the Group's order book now stands at AU$362million.
