Clough sharpens focus after profits fall

Clough says it will increase its focus on engineering, procurement and construction works in mining and oil and gas, after booking a 33 per cent drop in net profit to $33 million.

The net profit was down from $51.2 million the previous corresponding period.

The company said a reduction in underlying earnings to $47.2 million for the year to June 30 was due to a loss from its marine construction division.  

Clough announced in August it had entered an agreement to sell the division to Malaysia’s SapuraCrest Petroleum for $127 million.

It said the division was classed as a discontinued operation as of June 30, and underlying revenue from continuing operations was $54.7 million.

Despite the lower profit, Clough chief executive John Smith was pleased with the company’s performance.

“Clough has had a year of excellent operational performance across a range of world class projects,” Mr Smith said in a statement.

“Our marine construction team have performed admirably in very difficult market conditions and the sale of the division to SapuraCrest will provide increased opprtunieis for them and the business.

“The proceeds from the sale will leave the company debt free, with significant net cash, equipped for growth.

“You will see an increased emphasis from Clough on the EPC opportunities in Australia, not only in gas but on minerals projects.”

At 12:40PM (WST) Clough’s stock had gained 0.75 per cent, to trade at 67.5 cents.

Also today, Clough announced its joint venture with Downer EDI had been awarded an early contractor involvement deal with chemicals giant CSBP.

Under the contract the joint venture will conduct a detailed review of engineering and procurement documentation for CSBP’s ammonium nitrate/ nitric acid plant number 3 (NAAN3) in Kwinana.

The joint venture will also establish a plan and budget for the project’s $200 million engineering, procurement and construction phase.