Engineering and project management group Ausenco says it has finally stopped the run of earnings downgrades that has come to dominate this year, and revealed yesterday it was looking at a better second half performance.
Investors went ‘yippee’ and the shares jumped 42c or 16.9% to $2.91.
They went as high as $3.01, the highest they have been since early September.
Back in May the company told the market:
"Ausenco anticipates 2010 first half revenues of between $200 and $230 million and a reported net loss after tax of between $9 and $13 million. This projected result includes an office closure and surplus lease provision of up to $7.5 million, pre-tax, but does not include any intangible impairment losses that might be assessed following the current review. Reported net profit after tax for the 2010 full year is projected to be between $13 and $18 million."
The company revealed on June 30 that an impairment charge of $6.8 million had been taken and would be included in the first half accounts.
Then at the August 2010 interim profit announcement, directors said "An $8.1 million loss in underlying earnings (1H09: underlying earnings of $16.8 million) reflective of continued investment in strategic growth initiatives, difficult market conditions and adverse foreign exchange movements."
The company reported a net interim loss of $19.02 million, and said it will not pay an interim dividend, which prompted a 5.4% fall in its share price to $2.09 on August 25. That loss seemed to wipe out all hopes for a profit for the full year.
But the outlook didn’t mention any figures at all, despite optimism about 2011.
Yesterday the company revealed that a profit was now expected for the second half of 2010 (ending December 31).
The company said full year revenues were now anticipated to be in the range of $480 million to $520 million, while underlying net profit after tax would probably be between nil and $3 million.
And as a result the full year loss was now probably between "$9 million and $12 million."
CEO, Zimi Meka said the six months to December 31 were shaping up as being significantly better than the first half.
"The improved second half 2010 earnings represent a significant turnaround from our first half attributable underlying loss of $7.5 million and we are building a solid base for growth into 2011 and 2012," he said.
He did say that second half revenue "had been adversely impact" by around $3 million because of the rise in the value of the Australian dollar.
