GR delivers in tough market

Perth-based GR Engineering Services has delivered a strong result despite the doom and gloom of the resources sector, announcing today a rise in profit and an increased dividend payout.

GR Engineering posted a 33.8 per cent rise in net profit to $8.7 million for the six months to December, with revenue up 29.5 per cent to $127.2 million against the previous corresponding period.

The company also increased its interim dividend by 0.5 cents to 5 cents per share, fully franked.

However, despite the promising result, shares in the mining contractor were down 11 per cent to 84.5 cents each at 12:30pm.

“We are pleased with our operational performance and progress on key contracts, which has provided GR Engineering with a platform to maintain strong financial results in HY16, against a backdrop of soft capital expenditure in the global resources sector,” managing director Geoff Jones said.

GR Engineering’s earnings before interest, tax, depreciation and amortisation rose 9.1 per cent to $10.8 million, while earnings per share rose to 5.8 cents per share.

The company held $44.1 million in cash with interest-bearing debt of $1.5 million as at the end of December.

GR Engineering said its wholly owned oil and gas services subsidiary, Upstream Production Solutions, achieved sales revenue of $17.2 million during the half-year and continues to deliver financial outcomes in line with expectations, despite a market constrained by multi-year lows in energy prices and declining capital expenditure.

“GR Engineering is uniquely placed as an independent, ASX listed process engineering design and construction group providing fixed price, turnkey solutions to the mining and mineral processing sector,” the company said in a statement.

“The company continues to identify opportunities in Australia and overseas, particularly in the precious metals sector where GR Engineering has a strong reputation and long history of successful project delivery.

GR Engineering said it expects revenue and earnings in the second-half of FY16 to be consistent with the first-half.