AusGroup 2Q FY2012 earnings increased 67% y-o-y to AU$5.1 million, expects steady improvement in both revenue and profit margins
09 February 2012
- Cash and cash equivalents of AU$19.8 million as at 31 December 2011
- Order Book stands at AU$282 million as at 9 February 2012
AusGroup Limited (‘AGL’ or ‘AusGroup’ or the 'Group') today announced its results for the three / six months ended 31 December 2011 (‘2Q FY2012/HY2012’).
“For the period ended 31 December 2011, the oil & gas and LNG sectors remained robust and were supported well by the minerals and resources sector which provided the revenue and profits for the Group. We have also seen order intake build over the last few months which it is expected to continue to grow as we move into 2H 2012.
The Group is experiencing increasing demand for its services and tendered margins are improving. With increasing revenues and better margin work expected to continue into 2H 2012, I am optimistic that this year will position the Group for improved shareholder return.” – Stuart Kenny, Acting CEO / Managing Director.
Financial Highlights/Summary |
2Q FY2012
|
2Q FY2010
|
chg
|
HY2012
|
HY2011
|
chg
|
|
(AU$'000)
|
(AU$'000)
|
%
|
(AU$'000)
|
(AU$'000)
|
%
|
|
|
Revenue
|
150,608 | 160,882 |
-6.4
|
274,435
|
298,816
|
-8.2 |
|
Gross Profit
|
18,483 | 14,541 | 27.1 | 33,817 | 26,748 | 26.4 |
|
Gross Profit Margin
|
12.3%
|
9.0% |
-
|
12.3% | 9.0% |
-
|
|
Other Operating Income
|
581 | 2,010 | -71.1 | 1,396 | 4,079 | -65.8 |
|
Operating Expenses
|
-9,929
|
-11,084 | -10.4 |
-20,829
|
-21,651 | -3.8 |
|
Net Profit Attributable to Equity Holders
|
5,121 | 3,067 | 67.0 | 8,270 | 5,081 | 62.8 |
|
Net Profit Margin
|
3.4% | 1.9% | - | 3.0% | 1.7% | - |
|
Net Cash from Operating Activities
|
5,714 | 5,109 |
11,8
|
10,638 | 904 |
1,076.8
|
Revenue for 2Q FY2012 decreased by 6.4% year-on-year (“y-o-y”) to AU$150.6 million (2Q FY2011: AU$160.9 million). This decrease was due to the lower activity levels in the Australian Major Projects segment as a result of completion of projects in the prior year. This was partially offset by an increase in the Integrated Services segment revenues as a result of the higher activity levels in the Oil and Gas and LNG sector.
Likewise, revenue for HY2012 decreased by 8.2% y-o-y to AU$274.4 million (HY2011: AU$298.8 million).
Gross margins improved to 12.3% in both 2Q FY2012 and HY2012 (2Q FY2011: 9.0%, HY2011: 9.0%) primarily due to the recognition of a loss on a construction contract which eroded margins in 1Q FY2011.
Other income for both 2Q FY2012 and HY2012 decreased by 71.1% and 65.8% y-o-y to AU$0.6 million and AU$1.4 million respectively (2Q FY2011: AU$2.0 million, HY2011: AU$4.1 million). The decrease was due mainly to a decline in operating lease income due to the completion of a significant scaffolding contract in Singapore. Lower interest received decreased as a result of lower cash balances held.
Operating costs for both 2Q FY2012 and HY2012 decreased by 10.4% and 3.8% y-o-y to AU$9.9 million and AU$20.8 million respectively (2Q FY2011: AU$11.1 million, HY2011: AU$21.7 million). The main driver of the decrease was the bad debt expense incurred in 2Q FY2011.
The Group’s net profit attributable to equity holders for 2Q FY2012 was AU$5.1 million (2Q FY2011: AU$3.1 million). The Group’s net profit attributable to equity holders for HY2012 increased by 62.8% y-o-y to AU$8.3 million.
Financial Position as at: |
31 December 2011
(AU$'000) |
30 June 2011
(AU$'000) |
|
Property, Plant & Equipment
|
95,174
|
101,710 |
|
Cash & Cash Equivalents
|
19,783
|
26,578 |
|
Total Borrowings
|
15,103 | 22,009 |
|
Equity
|
144,928 | 139,082 |
|
Gross Gearing (Debt/Equity)
|
10.42% | 15.82% |
|
Net Gearing (Net Debt/Equity)
|
Net Cash
|
Net Cash
|
The Group’s balance sheet reflects cash and cash equivalents at AU$19.8 million as at 31 December 2011 and the Group maintained a net cash position.
Outlook
The Group is continuing to benefit from sustained demand for infrastructure developments, particularly in Western Australia which in turn is driving demand for the Group’s services in the LNG, iron ore and other related sectors. The Group expects the demand for its services to increase on the back of a continuation of demand for commodities which are driving these projects.
The Group continues to experience a consistent strong level of demand for pricing and tendering requests particularly in its Western Australian operations. The Group expects these levels of pricing and tendering activity to continue in line with economic forecasts which predict demand for commodities will continue to grow over the next few years.
As a consequence of the level of tendering activity, the Group’s tendered margins have also improved. The flow on benefit from these tender margins is expected to flow through to improved earnings in FY2012 and beyond.
The outlook for the Group’s fabrication and manufacturing businesses provides confidence as the current order book is growing whilst work being tendered is a mixture of current as well as longer term projects. The current order book will certainly flow into the 2013 financial year as contract growth and adjustment to delivery schedules add to the work. Where there has been some previous doubt about the sustainability of Australian fabrication, it is now being proven that it does has a place in project delivery plans through proven quality and delivery capabilities for niche fabricators, despite competitive pressure from low cost country operators.
The Group has dealt successfully with the constraints on the availability of project staff and labour with recruitment strategies being updated to address these staff and labour challenges in Australia.The Australian Federal Government has restructured immigration controls to allow international recruitment to become an effective remedy for the Group to ensure skilled personnel are able to be recruited for our current work activity and planned growth for the foreseeable future.
The outlook for the Western Australian markets – in iron ore mine development, LNG and oil and gas, in the long term, continues to be positive. The Group is seeing sustained demand for its services over the next few years due to the range of services that the Group can offer these markets as a multidisciplinary contractor.
AusGroup Limited’s order book value today stands at AU$282 million as at 9 February 2012.
Dividend
No dividend has been declared / recommended for the period ended 31 December 2011.
The Group wishes to inform you that an investor briefing pack for the 2012 half year results is available on the website - www.agc-ausgroup.com.
Attachments
2012 Half Year Results Briefing
Financial Statements And Dividend Announcement for the Second Quarter Ended 31 December 2011
Ends
