Runge's profit dips below expectations

MINING technology services group Runge has announced a net profit after tax of $A7.7 million for the 2009 financial year, 25% below its original forecast guidance of $10.3 million.
Runge's profit dips below expectations Runge's profit dips below expectations Runge's profit dips below expectations Runge's profit dips below expectations Runge's profit dips below expectations

Runge training session.

Staff Reporter

The Brisbane-based group previously reported that its ability to achieve the forecast guidance was dependent on a number of large software sales which were anticipated to take place in June.

However, the group said in today’s update that these sales were not completed by the June 30 deadline and were now expected to occur in the first half of financial year 2010.

The company also reported earnings before interest, tax and amortisation for the year of $12.7 million.

“Due to the significant downturn in commodity prices over the past 12 months, particularly since November 2008, and the uncertainty in markets, major global mining companies have changed their business focus to concentrate on production costs and improving their economic positions,” Runge managing director Tony Kinnane said.

“While this has substantially increased Runge's software sales pipeline and we were able to report one large software contract early in June, several others were delayed.”

He also said the group's business model was adaptable and it could shift its focus to pursue different opportunities.

“This shift in focus has meant that our original forecast, set 18 months ago, has not been achieved given these delays,” he added.

“Many of our new opportunities reflect the mining industry's drive for standardisation of processes and systems across their operations.”

The company believes that while the global economic outlook remains uncertain, the ongoing fundamentals of its business are strong.

Shares in Runge have slipped 1c to 69c in morning trade.

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