Earlier this week, Watpac announced a meagre after-tax profit of $1.3 million for the half year ending December 31, 2012, less than half of the $4.9 million recorded in the corresponding 2011 period.

Despite recording an underlying net profit before tax of $10.2 million, which reflected a 57% improvement from the prior corresponding period, Watpac said the after-tax profit result was affected by impairments associated with four property assets.

With three of the four properties contracted for sale below their carrying value, Watpac said the overall impairment was valued at about $4.4 million in net post‐tax asset.

In addition, Watpac said its profits were impacted by the difficult market conditions but added that the company was well-placed to capitalise on new opportunities, such as building the Ibis Adelaide hotel.

“To win a project of this calibre in such a competitive market is a strong endorsement of Watpac’s skills and experience in delivering high quality, high profile projects,” Watpac chief executive Martin Monro said.

Early works have already started on the $65 million South Australian hotel, which will feature 311 rooms and conference, food and fitness facilities across 17 storeys.

Construction is expected to create 200 jobs.

In further good news for Watpac’s balance sheet, the company yesterday said it had finalised a $93 million contract with Pluton Resources to mine iron ore at Cockatoo Island off the coast of northern Western Australia.

The contract will see Watpac deliver all operational mining and civil infrastructure services to the iron ore project, including drill and blast, loading, haulage and processing of ore for direct shipping.

Watpac was nominated the preferred mining contractor for the project in September.

Monro said works on the initial two-year agreement started in November, including the commissioning of a crushing and screening facility.

In light of the continuing crisis in the construction industry, he said Watpac was looking at more opportunities in the resources sector.

“Watpac has developed extremely strong credentials in the iron ore, gold and mineral sands space in Western Australia in recent years and it is very pleasing to see our brand is now being recognised outside the traditional construction sector,” he said.

“Watpac’s financial strength and expertise in remote project delivery is a key advantage in the current market and we are well-positioned to capitalise on future opportunities in the resources sector.”