Neptune forecasts first half loss
Neptune Marine Services Limited (NMS) anticipates that normalised NPAT for 1H FY10 to be in the range of breakeven to a loss of $1 million. The company said a drop in earnings during the first half of FY10 compared to the previous corresponding period was largely due to a sharper than anticipated decline across both the US and South East Asian markets.
Neptune said contributing factors to the weakness in the US and South East Asian markets included the strength of the Australian dollar, significant decline in drilling and exploration activity in the US, cancellation/postponement of exploration budgets, deferral of projects in SE Asia and lower margins due to deep discounting in some sectors.
The company said it is confident of a strong turnaround in profit and earnings for the second half of FY2010 and into FY2011.
Managing director and CEO, Christian Lange, said the overall softening of the macro market internationally had a negative impact on margins, but also said the company anticipates a significant turnaround in profitability in the 2H FY10 with market conditions in the US and Asia showing positive signs of recovery and improvement.
“Concurrently the Australian, Middle Eastern and UK markets continue to grow, both of our vessels have been contracted for new work, our level of offshore activity has increased considerably and we have a varied and robust collection of large, multi‐year tendering opportunities in the pipeline,” Mr Lange said.
“Additionally, we also expect to benefit from the strength of our global footprint as we are well placed to secure new projects across a range of markets as opposed to relying too heavily on one.”
Neptune said it has secured approximately $50 million worth of new contracts since November 2009 and has made inroads into new and emerging markets including Qatar where it was recently awarded a three‐year $20 million multi‐services contract.
As at 1253 AEDT, Neptune shares were down 7.5c to 51.5c.
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