GR Engineering Services Limited (ASX:GNG) (GR Engineering or Company) today announced its financial results for the half year ended 31 December 2016 (HY17).
GR Engineering reported HY17 sales revenue of $105.9 million, EBITDA of $10.8 million and NPAT of $7.9 million, demonstrating broadly consistent earnings outcomes to those achieved in HY16.
Commenting on the Company's HY17 financial performance, GR Engineering's Managing Director, Mr Geoff Jones, said:
"The first half of the financial yeat was marked by the successful completion and safe delivery of key projects and consistent operational performance. Whilst GR Engineering's core mineral processing business has continued tp underpin group earnings, a marked increase in the contribution from Upstream Production Solutions has been demonstrated in HY17".
The Board has resolved to declare an interim dividend of 5 cents per share, fully franked.
Contributions to GR Engineering's HY17 finacnial results were made primarily by domestic design and construcion works on the Nova Nickel Project in WA, the Wetar Copper Project in Indonesia, the Mungana Project in Queensland and Davyhurst Project in Western Australia, alongside the Olympias Phase II EPCM project in Greece.
Upstream Production Soltuions, GR Engineering's wholly owned oil and gas services business, achieved strong revenue and earnings growth in HY17, with revenue of $31.6 million in HY17 (HY16 $17.2 million) and PBT of $3.6 million (HY16 $1.0 million). This has been predominantly associated with increased levels of operations and maintenance services activity associated with the award of a contract to operate and maintain the Northern Endeavour floating production and offloading facility located in the Timor Sea. Upstream Production Solutions has continued to maintain its strong presence in Western Australia and Queensland, with key contract renewals being achieved for onshore and offshore operations and maintenance engagements in the Perth Basin.
Strong safety performance was recorded in HY17, with no LTIs being reported across the group. Continued efforts are being made to continually drive safety initiatives and maintain a zero harm workplace environment.
HY17 Results Summary
A summary of the HY17 financial results follow:
| |
|
HY17 |
HY16 |
| Revenue from operations |
$m |
105.9 |
127.2 |
| EBITDA |
$m |
10.8 |
10.8 |
| PBT |
$m |
10.5 |
10.5 |
| Tax |
$m |
2.6 |
1.8 |
| NPAT |
$m |
7.9 |
8.7 |
| Basic EPS |
cps |
5.2 |
5.8 |
| Net operating cashflow |
$m |
-15.3 |
-11.2 |
| |
|
HY17 |
HY16 |
| Net Cash |
$m |
41.3 |
42.6 |
| Total Equity |
$m |
51.8 |
49.1 |
Balance Sheet & Operating Cashflow
GR Engineering maintains its strong balance sheet, with cash and equivalents of $41.3 million and total interest bearing debt of $1.2 million as at HY17. The Company's working capital position remains robust, with current assets exceeding liabilities at a ratio of 2.02:1.00 as at HY17.
Net operating cash outflows of $15.3 million reflect normal working capital movements, predominantly attributable to an increase of $12.5 million in trade receivables, income tax payments of $3.2 million and divident payments of $7.6 million in the half.
Dividend
A fully franked interim dividend of 5.0 cents per share has been declared. The ex-dividend date is 13 March 2017 and the record date is 14 March 2017. The interim dividend is payable on 30 March 2017.
Strategy and Outlook
GR Engineering remains uniquely places as a proven process engineering design and construction group providing fixed price, turnkey solutions to the mineral processing sector. The Company will continue to leverage its technical expertise and tracj record in the delivery of these services in a market that is demading certain project outcomes and performance.
During HY17, the Company completed 16 studies and as a 31 December 2016 was engaged on a further 15 for projects at various projects at various pre-development stages. Opportunities exist for GR Engineering to be awarded design and construction contracts for some of these opportunities in the near term. Subject to the award of these contracts and continued strong contributions to GR Engineering's performance by Upstream Production Solutions, the Company anticipates FY17 financial outcomes consistent with FY16 results.
Further Information
Click here to view GR Engineering Services Limited's (ASX:GNG) financial results for the half year ended
31 December 2016 (HY17) including dividend/distribution details.
Download ASX release here:
GR Engineering Maintains Consistent Earnings and Shareholder Returns