According to Fulton Hogan its first-half pre-tax earnings dropped 10% as Australia’s economic woes kept a lid on resources and state sector spending, while the strong kiwi dollar eroded profit earned across the Tasman.
Pre-tax net profit fell to $83.4 million in the six months ended Dec. 31 from $92.8 million a year earlier according to a statement released by the company.
BusinessDesk reports that Fulton Hogan still expects to grow annual post-tax profit from the $138.2 million it earned in 2014, and is involved in $2.8 billion of tender bids which it hopes will boost its forward work book.
Fulton Hogan says its forward work position was down 20% from a year earlier, though “a significant flow of new projects coming to the market in early 2015” was likely to turn that around.
“A steep reduction in mining royalties has impacted infrastructure and maintenance spending by federal and state governments in Australia, combined with the negative impacts of a strong New Zealand dollar when repatriating Australian profits to the New Zealand parent company, has been a challenge,” says managing director Nick Miller.
“We remain confident that our business model, along with our committed workforce, will continue to deliver solid results on both the safety and financial fronts.”
The construction firm boosted annual profit 43% in the 2014 financial year as it bounced back from project write-downs a year earlier, and decided to put more emphasis on growing its water, rail and airport units as Australian revenue declined.
The construction company improved its safety performance with a total recordable injury frequency rate of 7.4 in the half, and has been on a drive to reach zero-harm in the workplace.
