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A RISING Aussie dollar has offset PWR Holdings Limited's (ASX:PWH) overseas growth in the last half, forcing a profit (NPAT) drop of 44 per cent to $1.8 million.
While revenue increased 0.8 per cent to reach $18.6 million, earnings before interest, tax, depreciation and amortisation (EBITDA) dropped by 36.2 per cent to $3.4 million.
The most recent results from 1H17 are stacked up against pro forma results from 1H16 which were negatively adjusted to offset the company's IPO costs, a fact which further sours the company's current financial state.
The company managed to hold its ground against the dollar at FY16 to deliver a forecast-beating profit result, however it failed to overcome the same mounting pressure during the most recent half.
Managing director and CEO Kees Weel (pictured) says despite the AUD's heavy toll and the additional financial pressure of a growing workforce, he is pleased with PWR's current progress toward future organic growth.
"The stronger AUD in the first half, particularly against the GBP has impacted revenue and profit," says Weel.
"We continue to invest heavily into our resources, both people and capital, to support current organic growth and ensure capability to deliver on future growth opportunities."
Weel says PWR's average employee headcount increased by 19.5 per cent over the last 12 months, primarily in production and engineering. Employee costs also increased 17.6 per cent on the prior corresponding period (pcp).
"The combined impact of the above has led to a lower first half result with both EBITDA of $3.4 million and NPAT of $1.8 million, compared to the pro forma result of 1H FY16," he says.
"Operating cash flow was $1.3 million, lower than the pcp of $5.8 million, as a result of the $2 million currency impact on trading, plus an increase in inventory of $1.8 million, to service current and future demand."
Around 85 per cent of PWR's business is generated offshore. As such, the company outlook suggests foreign currency volatility will continue to impact the business at the full year.
The company has declared an interim dividend of 0.9c representing 50 per cent of total NPAT, payable on 7 April.
PWR stock is volatile on the ASX today, recovering after this morning's 3 per cent slump to trade up more than 4 per cent at $2.29 as of 12:30pm AEDT.
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