20/02/2008 - 22:00

Boom delivers mixed results

20/02/2008 - 22:00

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Profit results lodged by a range of Western Australian companies this week indicate that it takes more than a resources boom for some companies to fire.

Boom delivers mixed results

Profit results lodged by a range of Western Australian companies this week indicate that it takes more than a resources boom for some companies to fire.

The impressive performers this week included drilling services company Imdex, which reported a doubling of first-half net profit to $12.9 million and upgraded its full-year earnings outlook.

Engineering and construction company Monadelphous Group reported a modest two per cent increase in net profit to $32.1 million.

But to put this in context, the profit was a record and it followed rapid growth in earnings in recent years.

In contrast, earthmoving and mining equipment supplier Emeco Holdings, which has been a serial underperformer since listing on the Australian Securities Exchange two years ago, reported a 12 per cent decline in net profit to $30.5 million for the six months to December 2007.

The profit was almost 24 per cent down on the $39.9 million achieved in the six months to June 2007.

Emeco has achieved solid returns from its Australian business but poor results offshore where it is seeking to expand.

Another disappointing stock was engineering company RCR Tomlinson, which increased net profit to $9.1 million but failed to achieve growth in earnings per share and failed to meet analysts’ expectations.

Monadelphous said falling revenue in its engineering and construction division resulted from the predicted ramping down of some major projects, together with timing affects from delays on new projects coming to market.

Its maintenance and industrials services division was a standout performer, delivering record sales revenue, up 21 per cent to $160 million.

Monadelphous said a highlight of the interim reporting period was a high level of contract wins, with $500 million of new projects secured - with the company confident of a number of additional large contracts being awarded in the coming months.

Despite the number of contract wins, delays in the timing of some of these projects coming online means that full year 2007/08 revenues will be similar to the last financial year.

Margins are expected to show overall improvement for the full year.

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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