GR posts $12m profit

Perth-based GR Engineering Services has recorded a slight decline in net profit for the 2018 financial year due to two settlement claims, despite an uptick in the group’s revenue.

The company reported net profit after tax of $11.6 million, down from the previous year’s result of $12.9 million, while revenue increased 18.8 per cent to $283.6 million.

GR Engineering said its profit result was affected by bad debt expenses worth about $7 million associated with settlement claims for Wolf Minerals’ Hemerdon tungsten and tin project and Eastern Goldfields’ Davyhurst refurbishment project.

Earlier this month, Eastern was ordered to pay GR $8.3 million in relation to the dispute.

The engineering company also said it would pay a final dividend of 5 cents per share, unfranked.

Managing director Geoff Jones said GR had completed a number of successful projects in the year to June, including commissioning gold processing plants at Dacian Gold’s Mt Morgans and Gascoyne Resources’ Dalgaranga project.

“The company’s FY18 financial results are indicative of a market dynamic that continues to feature high levels of competition and a low premium for risk in the technical services and fixed price delivery models that the group has been able to successfully execute,” he said.

“Importantly, GR Engineering continues to meet these challenges whilst maintaining earnings and shareholder returns.”

In its outlook for FY19, the company said its financial performance would be dependent on the timing of the Sheffield Resources’ Thunderbird mineral sands project and Capricorn Metals’ Karlawinda gold project.

“GR Engineering intends to provide FY19 guidance ahead of its 2018 annual general meeting, to be held on 22 November 2018 when it is likely to have more certainty in relation to the timing of key projects,” the company said in a statement to the ASX.

“In the interim, it notes that FY19 financial performance is likely to be weighted to the second half.”