Perth-based contracting company VDM Group has reported a net loss of $47 million for the six months ended December 31, the result of lower revenue, a small operating loss and more than $35 million in non-operating write-downs.
VDM reported a 20.3 per cent dip in revenue, to $130.1 million over the period.
The result was largely impacted by $35.3 million in write-downs, VDM said, including a $31.7 million charge on discontinued operations following its decision to sell Cape Crushing and Earthmoving Contractors, and a $3.6 million charge as part of its comprehensive review of operations.
VDM said the result was also hit by several legacy contracts, which contributed to operating losses and provisions of $6 million.
Managing director Andrew Broad said the result reflected the difficult measures undertaken throughout the half.
“Our focus during the six month period was to get VDM back on a firm footing by strengthening the balance sheet, reviewing and revaluing our businesses and ensuring that our loss-making legacy contracts were completed and fully accounted for,” Mr Broad said in a statement.
“It was always going to be a difficult half reflecting the lack of major contract awards in the prior period.
“Changes needed to be made, and these changes have now been put in place.”
Mr Broad maintained the company was on track to deliver a profitable second half of 2012 on the back of a restructured cost base and expected revenue growth.
“The company continued to be awarded significant contracts during the past six months, despite the uncertainty during the capital raising process,” Mr Broad said.
“Of our total work in hand, we expect to book at least $121 million of revenue during the current half.
“VDM is also close to winning additional contracts, some of which will be booked before the end of FY2012.
“Additional revenue growth will come from our engineering operations which are typically not represented in our work in hand due to the short-term nature of our work.”
At close of trade today, VDM stocks were up 9.7 per cent, trading at 7.9 cents.
