Engineering company WorleyParsons yesterday reported an 18% jump in first half profit as the resources sectors in Australia, Canada and the US continue to expand.
The company said it earned an interim profit of $152 million for the six months to December 31, 2011, up from $128.6 million in the previous corresponding period.
Directors said the "results reflect strong first half growth from improving global resource and energy markets.
"The first half performance supports WorleyParsons’ ability to deliver its guidance of good growth for the full year."
WorleyParsons said it would pay an interim dividend of 40c per share, franked to 79.3%.
That’s up from 36c a share (fully franked) for the first half of 2010-11.
Chief executive John Grill said strong spending by the company’s major customers underpinned growth in WorleyParsons’ key markets of hydrocarbons and minerals and metals.
Smaller customers in both sectors were experiencing project delays due to the tightening of available funds, however.
"The key markets driving growth during this half were Canada, Australia, China and the United States," Mr Grill said in yesterday’s statement.
"Growth was weaker in the government and public infrastructure markets.
"The overall trend is positive, allowing WorleyParsons to deliver earnings growth across all of our sectors for the period.
"Project awards continued in unconventional onshore hydrocarbons including Canadian oil sands, USA shale gas and Australian coal seam methane while activity in upstream offshore also remained strong.
"More recently we have seen an increase in activity in the downstream market in both petrochemicals and refining, particularly in the US and Latin America.
"The pipeline of project awards remains good in coal, iron ore and copper. Activity in the resource markets is providing the basis for growth in our Infrastructure & Environment and Power sectors.
"Our focus on the developing world continues to deliver project awards in places such as Ecuador, Costa Rica, Brazil, Indonesia and South Africa.
"These projects are supporting the continued growth of our hub offices as well as providing the foundation for developing sustainable businesses locally."
WorleyParsons expected to achieve "good growth" in underlying earnings in the full year when compared to the previous year, he said.
Underlying net profit in the first half was up 27% on the previous corresponding period, the company said.
Revenue for the half year rose 18% to $3.3 billion.
The shares eased 1.5% or 43c to $29.37.
And Kerry Stokes’ Seven Group has reported a steep decline in first-half net profit as it wrote down the value of its media investments. The group said yesterday net profit for the six months to December 31, 2011, was $52.14 million, down 57.8% from the previous corresponding period.
Seven said it booked an impairment charge of $161.8 million in the value of its investment in Seven West Media, and a further $5.8 million charge on other investments including Consolidated Media, which controls 25% of Foxtel and 50% of Fox Sports Australia (the renamed Premier Media Group).
The company said the write-down in Seven West reflected its prevailing share price at December 31, 2011.
"The share price of Seven West Media has recovered significantly since 31 December, and should it remain at these levels, the majority of the impairment is likely to reverse in the second half," Seven said in yesterday’s statement.
In fact at yesterday’s closing prices for Seven West media and Cons Media, the impairment losses had been erased.
On an underlying basis, which excludes significant items, Seven said net profit rose 29.2% to $159.6 million.
Total trading revenue for the half year was $1,955.6 million was up 29% on the previous first half period.
Underlying earnings before interest, tax and depreciation and amortisation (EBITDA) for the half year rose 31% to $288.6 million increased and underlying earnings before interest and taxation (EBIT) was up 35% at $254.0 million. Underlying profit before taxation was $204.5 million.
Seven Group chief executive Peter Gammell said the first half result was led by the strong performance of its WesTrac business.
Mr Gammell also flagged a hefty lift in full-year net profit, excluding significant items.
"Assuming current market conditions and growth continue, the company anticipates group underlying full year net profit after tax (excluding significant items) will be up 20 to 30 per cent compared to the 2011 full year result," Mr Gammell said in a statement.
WesTrac, the Caterpillar dealership in Western Australia, NSW/ACT and parts of China, reported a 67% increase in EBIT, Seven said.
"The company’s growth in Australia is being driven primarily by expansion in coal and iron ore mining – with a 30 per cent growth in product sales to $898.7 million," Seven said.
Seven said WesTrac’s China business, while impacted by exchange rate movements, reported a 12% increase in EBIT to $12.3 million.
Seven Group declared a fully-franked unchanged interim dividend of 18c a share.
The shares rose 33c to $8.99.
