SINGAPORE (May 12): AusGroup, the integrated solutions provider to the energy, industrial and mining sectors across Australia and Southeast Asia, posted earnings of A$3.3 million ($3.4 million) for the third quarter ended March 31 – reversing from its loss of A$24.1 million in the same quarter a year ago on lower costs.
The stronger bottomline comes in spite of group revenue having fallen 7.7% over the quarter to A$107.4 million from $116.4 million in the previous year, which was mainly due to reduced revenue contributions from the maintenance service business unit.
Cost of sales however fell 11.8% to A$91.7 million as compared to AU$103.9 million in 3Q16, which more than offset the reduction in revenue.
Additionally, other operating costs, combined with administrative expenses and marketing & distribution expenses, fell significantly by A$72 million in the quarter by 34.4% to A$4.2 million, compared to A$6.3 million for the corresponding period in FY16.
Finance costs, too, fell by 11.3% to A$4.7 million as a result of reduction in interest costs on loans from a related party, with a revised interest rate on loans at 5% per annum as compared to the prior rate of 8%.
AusGroup says it continued to monitor cost savings throughout the period, which resulted in overhead reductions of approximately A$1.5 million in 3Q17.
Additional impairment of trade receivables of A$1.8 million has also been provided over the quarter, based on the management’s expectation of recovery.
“For the second quarter in a row, we are able to report that the return to a sustainable profitable future is on track and is built on the foundations of our core capabilities demonstrated in the work we undertake in the energy and process sector. The key to our success now is to ensure that we continue the hard work and continue to provide a high service level offering to our clients and enhance our reputation in the industry further,” comments Eng Chiaw Koon, managing director of AusGroup, on the latest set of results.
“The overall business has performed well during this financial year and it is hoped that this performance level will continue to ensure that the group can focus on the important task of re-building our balance sheet, repaying our debt and returning value to shareholders,” he adds.
Shares of AusGroup closed 3.51% higher at 6 cents on Friday.
