Decmil shares closed the day at a three-month high despite the contractor bracing investors for a $102 million loss for the financial year following a handful of downgrades.
Decmil Group shares closed the day at a three-month high despite the contractor bracing investors for a $102 million loss for the financial year following a handful of downgrades.
In an update issued to market, Decmil projected unaudited revenue for Fy22 of $382 million and a net loss after tax of $102 million.
Should revenues crystalise as expected, it represents $118 million less than the $500 million the business anticipated at the start of the financial year.
Decmil issued estimates of $470 million in February this year, which were revised to between $425 million and $450 million in April and again only last month, to between $400 million and $425 million.
Based on today's update, Decmil revenue will be at least $18 million below its latest estimates.
Despite the weaker than anticipated performance, there were also some positives, and its shares rose more than 17 per cent to a three-month high to close the day at 14 cents.
The company said it had work in the pipeline to the tune of $596 million and had renegotiated several contracts to reflect supply chain delays and cost escalations.
Around $472 million of that work pertains to revenue expected to be delivered in FY23, Decmil said.
Operating cash flows also improved over the period and a closing cash balance of $39 million countered a matching debt value leaving the company's net debt position at zero.
Newly-appointed Decmil chief executive Rod Heale described the forecasted loss as a “significant and disappointing” statutory accounting result, but that it addressed many of the company's legacy issues.
“While the net loss is large, it reflects a very difficult period for Decmil through the COVID pandemic,” Mr Heale said.
“The board and management have taken a cautious and prudent assessment of various asset values and contract positions.”
Decmil outlined several causes for the downgrades, including a $23 million write-down of its contract claim balances and a $30 million impairment to its goodwill balance down to $45 million.
“After going through the process, I am confident the company is starting the new financial year with a very strong order book and a cash and liquidity position that enables the company to execute that order book.”