Sedgman downgrades profit forecast

Engineering contractor Sedgman says it expects to post a full-year net loss due to an inability to finalise the sale of surplus assets in time to bolster results.

Sedgman had previously forecast a 2014 financial year net profit in the range of $3 million to $6 million, but today said it now expects to post a net loss of between $5 million and $7 million.

The contractor said while its underlying results from operations remained in line with forecasts, it has had to make provisions for excess leased office space and slippage of key surplus asset sales.

Market conditions in the coal sector remain challenging, the company said, with most activity reduced to small-scale asset optimisation or critical upgrades.

This has led the company to assess rationalising underutilised leased office space. 

Sedgman also delivered better news to shareholders in the form of a $US134 million engineering, procurement and construction contract at Guyana Goldfields' Aurora gold project in the Caribbean.

The company will deliver the contract in joint venture with South American construction firm Grana y Montero.

Early site work commenced at the project in January this year, with first production targeted for mid-2015.

The scope of works includes delivery of a 1.75 million tonnes per annum processing plant, power station and integration management.

Sedgman shares were trading 2 cents lower at 43.5 cents at 11:01am WST.