NRW Holdings has booked a 22.8 per cent fall in first-half net profit, as foreshadowed earlier this month.
NRW Holdings has booked a 22.8 per cent fall in first-half net profit, as foreshadowed earlier this month.
Net profit after tax for the six months to the end of December 2009 reached $15.3 million, down from the previous corresponding period's $19.83 million.
Revenue grew 2.2 per cent to $275.63 million while earning before interest and tax fell 21.6 per cent to $25.78 million.
Part of the announcement is below:
Mr Jeff McGlinn, Managing Director and CEO of NRW Holdings Ltd, said "NRW is pleased to have delivered a strong result given the competitive environment experienced during the last twelve months. We have managed to win significant long term contracts with our existing customers and also been able to secure large contracts with new customers. As spare capacity is taken up in the market with many new projects coming on stream, we would expect margins to recover over time."
NRW Civil and Mining
NRW's record first half revenue was driven by the performance of both the Civil and Mining Divisions. Total revenue for the combined Divisions increased by 3.73% to $258.98m compared to the previous half year result of $249.67m.
The key drivers for growth in the civil division were contract awards for RGP5 South section (BHPB) and Cape Preston (Citic Pacific). Further growth is expected as tendering activity has become robust following a difficult period experienced in 2009.
Margins were affected by contracts awarded early in 2009, due to a competitive tendering environment. Tendering margins are expected to improve in the future with spare capacity exiting the industry as new capital works commence both in Australia and internationally.
The Mining Division continues to perform well with operations being undertaken at Bootu Creek (OM Holdings), Christmas Creek (FMG), Hope Downs, Simandou and Tom Price and the newly awarded contract at Western Turner Syncline. (Rio Tinto)
Promac Sales Pty Ltd
Promac has completed the transition to a sales only business with equipment (previously hired internally) being transferred to NRW Civil & Mining.
The subsidiary now derives its revenue from the sale of lighting towers, generators, tyres, spare parts and service/water trucks.
Demand for lighting towers, generators, water and service trucks increased due to intensive marketing efforts and brand awareness together with increased demand as a result of major projects coming on stream, however supplier delays impacted the sales of lighting towers during the second quarter.
Action Mining Services Pty Ltd
Action Mining Services continues to perform well in the context of prevailing market conditions with half yearly results ahead of expectations.
In addition to external revenue, Action continues to compliment NRW's Civil, Mining and Equipment sales divisions with cost synergies due to access to Action's extensive workshop facilities.
Action Mining's fabrication Division is experiencing increased demand for water and service trucks and has recently secured a contract to manage quarantine works for several contractors engaged on the environmentally sensitive Gorgon project.