VDM tips $5m first-half net profit

Improving conditions in the engineering and mining services industry over the past six months have boosted VDM Group's expectations of a higher first half profit for 2009/10, with the company today tipping a $5 million net profit.

VDM today released its earnings guidance for the first half of the 2010 financial year, and expects revenue to reach $240 million and earnings before interest, tax, depreciation and amortisation of more than $17 million.

Net profit is expected to hit $5 million, a 56 per cent increase on the previous corresponding period of $3.2 million.

"The improved result and return to profitability reflected the improved market and business conditions in the engineering and mining services industry over the past six months, particularly in Western Australia," VDM acting chief executive Jim van der Meer said.

"We expect the outlook for the next 6 months and beyond to remain positive."

"We are particularly pleased with the performance of our Construction and Resources & Infrastructure Divisions which have been the primary drivers of our earnings growth this half."

VDM reported a $106 million loss for the 2009 financial year on the back of hefty writedowns coupled with weak business confidence and highly competitive tendering.