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AusGroup Q1 earnings dive 59.1% to A$1.31m

PERTH-HEADQUARTERED construction and marine services provider, AusGroup, saw profit from its continuing operations and revenue plunge for the first quarter on reduced operating activity.

Profit from the continuing operations for the quarter ended Sept 30 fell 59.1 per cent to A$1.31 million (S$1.3 million), down from AS$3.21 million.

Earnings per share for Q1 was 0.09 Australian cent compared to 0.23 Australian cent.

First-quarter revenue was 43.7 per cent lower at A$86.56 million mainly due to the completion of major project work in the previous period. 

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Consequently, Q1 gross profit fell 28.7 per cent to A$8.1 million but operating efficiencies across business sectors lifted gross margin to 9.4 per cent.

Other operating costs combined with administrative, marketing and distribution expenses decreased for the first quarter by 3.6 per cent to A$5.3 million.

After the repayment of the reduced outstanding balance on bank debt, finance costs were 18.9 per cent lower at A$2.7 million for Q1.

AusGroup is seeking clemency to fulfill its debt obligations so as to continue as a going concern.

The firm has already won the support from holders of some S$100 million notes who voted on Oct 19 in favour of pushing out the repayment of the notes principal by four years and reducing the coupon rate for these notes.

It has also obtained the support from its major shareholder, Ezion Holdings, to extend the term of its current shareholder loan by five years to October 2023 and at a reduced coupon rate.

It is next looking to secure an extension from its principal banker, DBS, for the repayment of a term loan.

On the equity front, it is looking to raise in excess of S$60 million from the placement of new shares and a proposed rights issue. The extraordinary meeting to approve the issuance of these shares is scheduled for Nov 15.

AusGroup has A$87.37 million of borrowings and debts due in one year or less as at Sept 30.  Its cash and cash equivalents stood at A$23.16 million at the end of Q1.

It had work in hand to the value of A$165.1 million as at Sept 30.

Shares in AusGroup traded flat at 3.8 Singapore cents at 9.05am after the release of its Q1 results.