CARDNO RESULT HAMMERED BY WRITEDOWNS

CARDNO RESULT HAMMERED BY WRITEDOWNS

WRITEDOWNS have pushed Cardno Limited (ASX:CDD) deep into the red, with the infrastructure firm posting a full year loss of $145.2 million.

Impairment charges of $195.5 million relating to the divestment of its Ecuador business impacted the result, down from a net profit of $78.1 million in the previous year.

Net operating profit after tax of $50.3 million was at the top end of Cardno's forecast, while gross revenue increased 9 per cent to $1.427 billion.

Cardno chairman John Marlay says performance was adversely impacted by challenging economic conditions in key markets.

"Despite external challenges, we are not satisfied with our results and are continuing to undertake significant action to improve overall business performance and profitability," Marlay says.

Several large projects in the Americas have wrapped up, while oil prices and reduced US government expenditure curbed performance in the region.

Operations in the Asia Pacific region reflect a decline in the resources sector and demand for mining services. Delays and cancellations in a number of publicly-funded infrastructure programs also contributed to the result.

Newly appointed Cardno CEO and managing director Richard Wankmuller says despite difficult market conditions contributing to a decline in organic revenue, the group maintains a strong financial position in FY16.

"Asia Pacific performance will remain subdued for the remainder of 2015 with infrastructure work in New South Wales a notable exception," Wankmuller says.

"The Americas region is well positioned with backlog, however conversion of this work into profitable fee generating revenue will be a key success factor.

"The recent strengthening of the US dollar against the Australian dollar provides a positive impact to group results and a partial hedge against the impacts of oil price volatility."

He says the board is focused on improving business performance, including building capital and prioritising profitability over revenue growth.

A string of successful project bids in Australia is expected to bolster revenue expectations, with 85 per cent of Cardno's backlog to be delivered this financial year.

A fully franked dividend of 7c will be paid on October 2.

 

Help us deliver quality journalism to you.
As a free and independent news site providing daily updates
during a period of unprecedented challenges for businesses everywhere
we call on your support

From pandemic side hustle to multi-million dollar business: Meet Ling Fung
Partner Content
Ask any parent, and they’ll tell you: preparing for a new baby is no easy task.&n...
Metro Baby
Advertisement

Related Stories

Is attribution software killing our creativity?

Is attribution software killing our creativity?

As digital marketing continues to evolve at rapid speeds, businesse...

Sonic Healthcare acquires 20pc stake in gut health business Microba Life Sciences

Sonic Healthcare acquires 20pc stake in gut health business Microba Life Sciences

Global medical diagnostics giant Sonic Healthcare (ASX: SHL) has ag...

Collins Foods pauses Taco Bell roll-out amidst $16.9m impairment crunch

Collins Foods pauses Taco Bell roll-out amidst $16.9m impairment crunch

Australia's largest operator of KFC restaurants has struggled t...

After October lull and a record Black Friday-Cyber Monday weekend, what's next for retail?

After October lull and a record Black Friday-Cyber Monday weekend, what's next for retail?

Just as the Australian Bureau of Statistics (ABS) announced month-o...