24/02/2009 - 09:13

NRW Holdings up on 45% profit increase

24/02/2009 - 09:13

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Shares in NRW Holdings have risen sharply in early trade on the back of a 45 per cent lift in its interim net profit driven by higher revenue from its mining division.

NRW Holdings up on 45% profit increase

Shares in NRW Holdings have risen sharply in early trade on the back of a 45 per cent lift in its interim net profit driven by higher revenue from its mining division.

The mining services company today reported a net profit of $19.8 million for the six months to the end of December 2008, up from $13.7 million from the previous corresponding period.

Total revenue was up 5.1 per cent to $266.5 million, held back by the company's civil contracting division with its revenue falling 29 per cent to $156.1 million.

The lower revenue was due to the slower ramp up of new Rio Tinto Brockman contracts, however production was unaffected at BHP Billiton in Newman and Fortescue Metals Group's Christmas Creek project until contract suspension.

In November, FMG suspended work on the Cloudbreak-to-Christmas Creek rail line.

Meantime, revenue for NRW's mining services arm skyrocketed 395 per cent to $93.6 million.

NRW said the jump in mining revenue was due to the start of new contracts at Fortescue Metals Group's Cloudbreak mine and ongoing projects with Rio Tinto in the Pilbara and Guinea.

Total earnings before interest, tax, depreciation and amortisation was up 43 per cent to $43.1 million and the directors have declared an fully franked interim dividend of one cent per share.

Looking forward, NRW said it expects a strong second half with its order book for fiscal 2010 around $400 million however remained cautious "as the number of projects being tendered has certainly declined over the past 4-6 months".

"... therefore a far more competitive and price sensitive environment currently exists," NRW said.

Shares in the company climbed three cents or 11.3 per cent to a high of 29.5c before easing to 28c at 11:22 AEDT.

 

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