Resources lead profits reports

ENGINEERING and contracting firms with Western Australian operations have reported their financial results to the market, with most performing well in the stronger resources climate. Cashing in on the resources boom, Monadelphous Group had another year of record financial performance, announcing an after-tax profit of $16.7 million for the year to June 30, up 95 per cent on the previous year. Revenue was also higher at over $390 million, an increase of 77 per cent, the company said. Monadelphous paid a final dividend of 9 cents per share, taking the full year’s dividend payout to 19.25 cents per share fully franked. Managing director Rob Velletri said record levels of resource development activity continued to provide opportunities. “Projects flowing from developments in the iron ore industry in Western Australia and the coal industry in Queensland, coupled with our broad exposure to the whole minerals and resources sector, will continue to drive healthy revenue growth for Monadelphous,” Mr Velletri told the Australian Stock Exchange. Downer EDI, which has operations in WA, delivered a record after-tax profit of $104 million for the year ended June 30, up 28 per cent. Revenue for the year was $3.8 billion, a 19 per cent increase, Downer said, announcing a final dividend of 12 cents a share, 70 per cent franked. During the year, the firm completed the acquisition of Perth-based mining consultancy Snowden Consulting Group and sold local castings foundry business, Roche Castings, to Bradken Limited for $26.7 million. Professional services provider WorleyParsons announced a record annual net profit for the year to June 30 of $57.7 million, up 87.7 per cent on the previous year. Normalised earnings per share were 37.6 cents, an increase of 64.2 per cent.The company also announced the acquisition of the remaining 50 per cent of its Canadian joint-venture company, WorleyParsons MEG Ltd. RCR Tomlinson last week reported a net profit after tax of $6.47 million for the year to June 30, more than double the previous year’s result. RCR’s sales for the year increased 67 per cent to $163.64 million, almost equally from acquisitions and organic growth. The company said it had benefited from a booming operating environment and from the acquisitions of the Stelform engineering group and Laser & Allied Cutting Services. RCR managing director John Linden said the outlook for the engineering services sector remained extremely strong, with RCR targeting further growth by acquisition. Another engineer to report a strong result was engineering, mining and civil contractor Macmahon Holdings, which posted a record net profit of $19.6 million, capitalising on the resources boom. However, Clough went against the trend of increased profits in the sector, reporting a net loss of $59.6 million for the year ended June 30. This primarily reflected losses incurred on its Victorian BassGas contract, in which it is involved in litigation against operator Origin Energy, with claims of $110 million plus. Revenue from the group’s operations of $549.3 million was 27 per cent lower than the previous year. Announcing at the end of 2004, a strategic alliance with South African engineering, constructions and manufacturing group Murray & Roberts, in which the foreign company is poised to take majority ownership of the 86-year-old Perth-based firm, Clough is into the second year of a five-year rebuilding plan after the difficulty with BassGas. Clough chief executive and managing director David Singleton said Murray & Roberts remained firmly behind what the company was doing. Importantly, Mr Singleton said, the company had made all its provisions for the BassGas project. “We have boxed that project now,” he said.Mr Singleton said the order book had improved since the end of the previous financial year, with work in hand totalling $851.1 million, more than double the value at June 2004. An important project moving forward would be the Gorgon gas front end engineering design contract, he said.