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TOUGH market conditions in the resources sector shows in Sedgman’s (SDM) half year report of $12.3 million net profit after tax, a fall of 36.5 per cent on the same period last year.
Revenue was down to $256.3 million, a 20.9 per cent decrease from the $324.1 million reported for the first half of 2011.
Sedgman shares fell 10.92 per cent following this today’s announcement, trading at $1.06 late this morning.
CEO Nick Jukes (pictured) says the disappointing result is a reflection of low commodity prices, the high Australia dollar and subsequent project deferrals.
“We have responded by reducing costs and improving efficiency, as well as renewing our focus on our diversification strategy across commodities and regions,” Jukes says.
This included a reduction to the company’s workforce, which incurred a $1.8 million redundancy payout in October.
“The next six months will be challenging for Sedgman,” Jukes says.
“However the market is showing some signs of improvement with some increases in commodity prices and opportunities emerging in the Australian market and other key regions of Africa, Asia and the Americas.”
The company’s resolution to diversify is evident in the proposed acquisition of South African based company MDM Engineering.
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