Sedgman wins work, flags loss

MINING services company Sedgman has warned of a half-year loss for the current period, despite announcing a new contract for a South American gold mine.

Kristie Batten

Sedgman has been awarded preferred contractor status for Guyana Goldfields’ Aurora project in Guyana.

The company has placed the order for the mill through its Shanghai procurement hub and hopes to be formally awarded the engineering, procurement and construction contract later this month.

Meanwhile, Sedgman said the recent award of the Boggabri coal-handling and preparation plant contract was positive, but other near-term opportunities identified continued to be delayed, placing negative pressure on earnings.

Sedgman also said its half-year profit would be impacted by costs associated with restructuring to reduce overheads and streamline business systems, though it said it did not expect any further job losses.

Based on the weak trading conditions, Sedgman flagged a half-year loss after tax of $A6-8 million.

“We expect earnings in the second half of the 2014 financial year to be positive, given the Boggabri and Aurora projects, and Sedgman remains in a strong financial position with net cash of $78.4 million as of September 30, 2013,” Sedgman CEO and managing director Nick Jukes said.

“While market conditions remain challenging, we anticipate that our likely FY14 reported earnings will be broadly in line with our FY13 result and Sedgman remains in a strong position to participate as and when projects proceed.”