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AusGroup Q4 profit dented by impairment

AusGroup Limited, an integrated service provider to the energy, industrial and mining sectors, said its net profit for the fourth quarter ended June 30 dived 88.4 per cent from a year ago to A$261,000 due to an impairment arising from decreased certainty in capital expenditure in the energy sector.

The impairment of A$3.5 million (S$3.51 million) related to AusGroup's fabrication facilities in Singapore (A$2.9 million) and Kwinana (A$600,000).

Revenue for the quarter, however, grew 7.7 per cent year on year to A$90.6 million thanks to increased activity in maintenance, scaffolding projects and revenue contribution from newly acquired subsidiaries.

"In a challenging external environment, the full year result of A$6.2 million was a significant improvement on the prior year net loss of A$11.9 million and emphasises significant progress has been made during the year to rebuild AusGroup's Engineering Services business and diversify into the Ports & Marine Services business," said group managing director Gerard Hutchinson.

Revenue for the full year leapt 41.3 per cent to A$427.41 million, thanks to increased contribution from maintenance services and scaffolding projects. Despite continued decline in capital projects across the oil and gas and resources sector, AusGroup's order book as at June 30 stood at A$466.6 million.

"We are confident that our strategy of focusing on building long-term and recurring contracts continues to take shape and will provide a sustainable revenue base through FY2016 and beyond," he said. "This was underpinned by the maintenance business with another S$39.5 million of additional orders during Q4 2015. The order book of A$466.6 million continues to support sustainable revenue growth in our legacy business of Engineering Services."

The construction of the port and fuel facility at Port Melville was completed on July 31 and remains on track to generate a positive contribution in fiscal 2016.