05/12/2011 - 10:50

Clough downgrades profit expectations

05/12/2011 - 10:50

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Clough downgrades profit expectations
New Clough boss Kevin Gallagher has taken over just as the company revises its forecasts downwards.

Clough announced today it anticipates underlying earnings for the current half year will be lower than analysts expectations, following cost overruns and lowered margins.

The company said underlying earnings from operations are expected to be around $22 million, with underlying net profit after tax around $19 million.

Analysts had predicted underlying earnings to be between $25 and $27 million, according to the company.

Clough said today it lost up to $3 million on cost overruns on a fixed price contract for the upgrade of three NSW gas regulating stations.

Increased contract values without a corresponding increase in fee also saw lowered margins on two EPC contracts.

“The fee structure for these contracts is the subject of ongoing discussions with the clients,” Clough said today in a statement.

The company today also said it expected half-year revenue to be in line with the previous corresponding period’s $524 million.

For the full year, it said it expects underlying earnings from operations will be above last year's figure of $54.7 million.

The announcement comes one month after former Woodside executive Kevin Gallagher commenced at Clough as the company's chief executive.

Clough shares closed down 6 cents at 74 cents.

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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