26/02/2013 - 10:55

Ausdrill half year profit drops on writedowns

26/02/2013 - 10:55

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Mining services and drilling group Ausdrill is confident of a stronger performance in the second half of the financial year, despite posting an 11.9 per cent drop in interim profit.

Revenue was up 13.4 per cent, however, to $580.2 million, on the back of increased operational capacity in the Australian resources sector and an uptick in activity in Africa.

Net profit for the six months to December 31 came in at $48.1 million, down from $48.1 million in the previous corresponding half year.

Ausdrill said its profit was negatively impacted by a number of significant writedowns, as well as a general slowdown in the Australian mining sector from September onwards.

The $9.3 million worth of writedowns related to the restructure of financing arrangements, the acquisition of Best Tractor Parts and a large bad debt provision.

Adjusting for the impairments, Ausdrill recorded an underlying net profit of $57.4 million, in line with previous guidance.

Ausdrill will pay a fully franked interim dividend of 6.5 cents per share.

For the second half of the year, Ausdrill said it expected improved trading conditions in Western Australia, Queensland and New South Wales, but warned cost reduction efforts could lead to tightening margins.

“Taking into consideration these matters, and subject to any change in circumstances, the company expects that the second half performance for FY2013 will be better than that reported in the first half with an overall target of at least matching the reported net profit after tax for the year ended 30 June 2012,” the company said in a statement.

“The resource industry is expected to remain strong over the medium term in Australia and Africa where Ausdrill has a long-established presence and local know-how and, as a consequence, Ausdrill remains very well placed for continued growth beyond the current financial year.”

At 10:30AM, WST, Ausdrill shares were up 6.16 per cent, trading at $3.10. 

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