Civmec Q2 profit slides 76.3% to A$1.3m as projects get completed

CONSTRUCTION and engineering group Civmec saw second-quarter net profit slide 76.3 per cent to A$1.3 million (S$1.25 million) from A$5.3 million a year ago, due to projects completing in the period, but expects to be profitable for fiscal 2019.

Q2 earnings per share was 0.25 Australian cent, down from 1.06 Australian cents for the same period last year. No dividends were declared.

Civmec, which is dual-listed in Singapore and Australia, announced that revenue for the three months ended Dec 31, 2018, decreased 21 per cent to A$134.9 million from A$170.7 million due to projects completing in the period. 

Finance costs were also higher in Q2 - they rose 37.1 per cent to A$1.2 million from A$868,000 - due to increases in bank bills and guarantees, interest expenses and finance leases.  

Finally, other income also decreased, primarily due to proceeds received from an insurance claim in the comparative period. Insurance recovery was A$1.2 million for Q2, down 78.6 per cent from A$5.7 million a year ago.  For the half year ended Dec 31, 2018, Civmec made a net profit of A$5.8 million, down 24 per cent from A$7.7 million for the 2018 fiscal year. This was due to the insurance recovery in the period and higher finance costs, the group said. 

That said, revenue increased 11.8 per cent to A$335 million from A$299.6 million.

Civmec said: "The focus for FY2019 is on consolidating the group's position, successfully closing out current contracts, converting new opportunities and continuing the successful delivery of our ongoing maintenance contracts."

It also expects to be profitable, given a "notable increase" in investment in the primary sectors they operate in. This includes investment in LNG (liquefied natural gas) plant expansions and opportunities in the iron ore segment, including a number of sustaining capital projects.