Opus first-half profit rises but only because of tax credit
Aug. 9 (BusinessDesk) - Engineering firm Opus International Consulting Ltd.'s first-half net profit rose 8.4%, but only because its tax bill more than halved.
Earnings before interest and tax (EBIT) fell 13% to $13.5 million for the six months ended June 30, “reflecting the challenges in parts of our business,” chairman Kerry McDonald said in a statement. Revenue rose 6.3% to $196.7 million in the six months. The bottom line of $11.3 million was boosted by a $1.4 million tax credit.
“We experienced significant disruptions from the Christchurch earthquakes and the severe floods and cyclones in Queensland,” McDonald said. “Despite that, we have achieved an uplift in revenue and earnings and maintained a healthy balance sheet and are well positioned to ride through the current turbulence in global financial markets.”
EBIT fell in all regions except Canada where it rose to $528,000 from $180,000 in the previous first half. Key New Zealand EBIT fell 9.7% to $13.6 million, Australian EBIT slipped 1.7% to $1.35 million and the company made a $775,000 loss in Britain compared with a $240,000 profit in the previous first half.
McDonald said there were significant differences in the economies in which Opus operates, particularly in infrastructure and investment.
“However, we are matching work and resources across the business, including the additional work now arising from Christchurch and Queensland and Opus' global capacity is a key strength,” he said.
Opus shares sank 5.3% to $1.80 after the results were announced, amid a sharemarket rout on global turmoil. The result was well short of Forsyth Barr analyst Andrew Harvey-Green's forecast of $17.8 million in EBIT and a $12.9 million net profit. He had been expecting a strong performance from New Zealand and Australia.
The shares peaked at $2.40 in May and have been trending lower since.
Opus will pay a first-half dividend of 3.8 cents per share with 1.63 cents imputed compared with last year's 3.4 cents first-half dividend which was 1.46 cents imputed.