AUSGROUP reported a dismal AUD11.9 million in net loss for FY14 (ended June) but it said that, after adjusting for one-offs, it would have achieved a net profit of AUD11.5 million instead.As shown in the chart below, the one-offs include losses and write-downs on two projects amounting to AUD26.4 million.
On the positive side, there was a recognised profit of AUD14.5 million from the sale of its fabrication yard in Tuas, Singapore.
Adjusted profit of AUD11.5 million = Reported loss of AUD11.9 million + one-off items (in green) -- one-off gain from a sale of property (in grey). Source: AusGroupNonetheless, the company did suffer from revenue falling 48% to AUD302.4 million due to plunging capex by the minerals and resources sector in Australia.
Stuart Kenny, CEO and MD of AusGroup. NextInsight file photo"It's our lowest revenue in a number of years and we think it's the lowest it's going to be for a number of years going forward," said MD and CEO Stuart Kenny at a results briefing last Friday (Aug 29).
Shifting its strategy from construction services for the mining sector to the oil & gas sector and asset maintenance contracts, AusGroup ended the year with a healthier order book of AUD376.4 million, up from AUD260.3 million of a year earlier.
Out of this orderbook, about AUD300 million are contracts from the oil & gas sector with the rest from the minerals and resources sector.
AusGroup leaves FY14 behind with a stronger balance sheet after raising funds from a placement of its shares, and refinancing of its loans and securing fresh bank guarantees. A second placement of shares took place to fund business expansion plans with Ezion Holdings.
As a result, AusGroup's total borrowings have decreased from AU$30.0 million to $19.6 million while gearing has reduced from 17.3% to 10.0%.
"We are now well positioned to take advantage of opex (operating expenses) opportunities before us in the oil and gas sector, longer-term projects that give us a longer term view of our revenue," said CFO Gerard Hutchinson.
Asked about the risk of losses similar to those reported in 1Q recurring for the contracts on hand, Mr Kenny explained that those losses related to complex piping and mechanical work in an existing plant. There is no such work in the current orderbook nor in the tenders that AusGroup has submitted for future work, he said.
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Business enhancement aside, Ezion Holdings will emerge with 17.83% of the enlarged share capital of the company, up from the 6.9% it acquired through married deals in April this year. AusGroup's Powerpoint materials are available on the SGX website. |
