Better times ahead for HWE

A RETURN to profit in the 2003-04 financial year, and robust order levels, set the tone for further improvement in its results over the next two years, Australian contractor Henry Walker Eltin said this week.
Better times ahead for HWE Better times ahead for HWE Better times ahead for HWE Better times ahead for HWE Better times ahead for HWE

Bruce James.

Emily Roberts

The company currently has more than $1 billion of work already booked or under negotiation for the new fiscal year.

It booked a net profit of $16.9 million for the year to June 30, 2004, compared with a $23.6 million loss the previous year. The improved result was achieved on revenue of $1.11 billion, up from $1.07 billion.

Net debt and gearing were also reduced.

The company's turnaround from last year's reported losses was clearly evident, said chief executive Bruce James.

"This is our first clean full-year result, and we have clearly established a strong platform of future revenue given our success in securing new contracts and extensions," he said.

"Margins in all our businesses are expected to improve over the next two years as we move into a growth phase and benefit from more disciplined tendering and risk management processes."

While revenue increased, weaker activity in the HWE civil engineering division (which now combines HWE Civil and Simon Engineering) and below budget performance in Simon Engineering projects resulted in an earnings before interest and tax loss of $7.7 million for the period.

Mining arm, HWE Mining continued to be the company's mainstay, posting slightly improved revenue of $695.7 million and reversing the previous year's bottom line loss of $33.2 million with a $26.3 million net profit.

As of August 2004, HWE's order book was $3.7 billion, with 25% of 2004 revenue level on hand for 2005.

The company announced in May this year it had secured its biggest ever contract worth US$1.2 billion to supply coal mining services and develop mine infrastructure at PT Kaltim Prima Coal Bengalon project in Indonesia.

It also announced earlier this year it was also awarded a $43 million development driveage contract for BHP Billiton Mitsubishi alliance’s Broadmeadow punch longwall mine. The job entails three months of pit infrastructure installation by wholly owned subsidiary Simon Engineering Australia, and the driveage of approximately 25km of gate roads and longwall installation headings over a 20-month timeframe.

In November last year HWE also secured a six-year $200 million-plus development contract for White Mining’s Ashton project.

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