Profit up for coal prepper

COAL handling and preparation plant specialist Sedgman has reported a 70% jump in net profit after tax for the six months to December 31.
Profit up for coal prepper Profit up for coal prepper Profit up for coal prepper Profit up for coal prepper Profit up for coal prepper

Image courtesy of Sedgman.

Noel Dyson

The company’s revenues grew to $A324 million from $257 million over the same period in 2010.

Earnings before interest, tax and amortisation almost doubled in the period, leaping from $16.7 million to $31.7 million.

The company’s NPAT was $19.4 million. Earnings per share increased to 9.8c a share from 5.9c in FY2011.

Sedgman directors have declared an interim fully-franked dividend of 4.5c a share, payable on March 29 to shareholders registered by March 15.

Managing director Nick Jukes said margins had improved over the period in line with expectations.

He said the company also managed to avoid some of the fallout from challenging projects that had blighted its performance in the corresponding period.

Foreign exchange losses and lower margins at three projects, mainly due to sub-contractor performance, were to blame for those poor results in the previous corresponding period.

With those issues sorted out, EBITA for projects returned to expected levels for the half year.

Sedgman is continuing its push into operating CHPPs as well as building them.

The company reckons these operations contracts offer attractive longer-term recurring income and also diversify its business risk.

Sedgman also improved its net operating cash flow during the first half to $28.5 million, up from $14.9 million for the previous corresponding period.

It finished December with $47.9 million in the bank and unused debt facilities of about $110 million.

Jukes said Sedgman was well positioned, with a $604 million order book and a good project pipeline along with a strong balance sheet.

“Strong growth opportunities continue to emerge in Australia, particularly in our traditional coal markets and we remain well positioned to benefit from international opportunities given our established position in key global markets,” he said.

The company is working to grow its hub capabilities in South America, China and Africa.