Balcatta-based clean energy technology group Orbital Corporation Ltd has confirmed plans to continue to expand in aligned business sectors after today announcing a $500,000 net annual profit.
Balcatta-based clean energy technology group Orbital Corporation Ltd has confirmed plans to continue to expand in aligned business sectors after today announcing a $500,000 net annual profit.
The result, which was in line with the company's forecast of a second half and full year 2008 financial year profit, would have been above last year's $1.3 million net profit but for the stronger Australian dollar.
Orbital said today that its bottom line earnings were reduced by approximately $1.2 million due to the rising Australian currency which negatively impacted earnings generated from its US manufacturing joint venture, Synerject, engineering revenue and royalty income.
The profit result was achieved on total revenue of $14.9 million (2007: $15.2 million), with the main contributors being a slightly decreased contribution of $11.7 million from engineering services and increased contribution of $2.7 million from licence and royalty income.
"Despite a generally tough operating environment, we are pleased to have achieved a profit for the year," chief executive Terry Stinson said.
"Importantly, we are in a strong financial position with cash on hand of $8.8 million at year-end, which gives us the balance sheet strength to pursue our growth objectives.
"We have achieved several important strategic goals during the year, including our expansion into the alternative fuels business through the acquisition of Sydney-based Orbital Gas Product.
"These growth initiatives will add value in future years and position the company extremely well in the current environment.
"These and other developments in the Liquid Natural Gas (LNG) market provide exciting new growth avenues for Orbital in the current market environment, where demand for alternative fuels technology is rapidly increasing.
Synerject LLC generated a 2% increase in revenue to US$81 million during the 2008 financial year.
Synerject generated a US$2.6 million operating cash flow, paying its first dividend of US$840,000 to Orbital, and remains in a strong financial position with a gearing ratio of 18%.
Engineering Services generated revenue of $11.7 million for the full year, slightly lower than the previous year, reflecting the challenges of the downturn in the general market and the stronger Australian dollar.
The launch of the new FlexDI 'One Engine - Any Fuel' system further cemented the company's diversified business direction, expanding Orbital's Direct injection systems to operate with a wide range of both liquid and gaseous fuels, generating a significant response from both China and Europe.
The overall number of Orbital DI engines earning royalties remained steady during 2008 compared to the previous year.
The 2008 financial year saw two new products using Orbital's technologies
introduced, including the first ever 4 stroke engine application the multi-fuel Polaris MV800 ATV.
"Licensing and Royalty revenue increased by 17% to $2.7 million compared to the previous financial year," Mr Stinson said.
"Despite the steady royalty volumes, the contribution from this sector fell by $0.3 million due to the impact of the weakening US Dollar but this was offset by increased licence fees," said Mr Stinson.
Meanwhile Orbital announced several strategic developments during the year to commence its expansion into the Alternate Fuels Market.
"We have unveiled a number of new initiatives aimed at furthering the Company's expansion into the alternative fuels business, including the formation of Orbital Gas Products, (formally Boral Alternative Fuel Systems), a tier 1 supplier of LPG systems to the Ford Motor Corporation and to the aftermarket operators," Mr Stinson said.
"In addition, our growth in this area received a further boost with the Federal Government announcing funding for the installation at our facilities in Perth of a heavy duty engine testing facility capable of operating engines on natural gas, LPG and biodiesel as well as diesel and gasoline."
