Resource Equipment shares have slipped on the ASX, after the company announced that weak market conditions would result in the company experiencing zero profit growth in financial year 2013.
REL said weak sales activity and cost and timing overruns on a pipeline installation deal had negatively impacted its first half result.
REL previously advised the market that its net profit to October 31, 2012 was around 30 per cent higher than at the same time in 2011.
The company said it now expected first half EBITDA to be around 15 per cent ahead of the same period in last year and net profit to remain steady around $6.5 million.
“A number of shorter term, one off projects have recently come to an end or been cancelled and at the same time the company is incurring costs of previously announced long-term strategic initiatives, such as the establishment of an operation in Indonesia, which is yet to commence active trading,” RQL said in a statement.
“These conditions are expected to lead to a soft second half. Consequently, it is likely the company will no longer experience profit growth in FY13.”
REL said it would address its cost structure and provide further updates to the market should any material changes occur.
At close of trade today the company’s shares had dipped 16.2 per cent, trading at 31 cents.
