The situation means that, according to Clough accounting principles, the costs associated with the projects had been brought to account for the current financial period while the revenue from these claims will not be brought to account until the next quarter, meaning the company will now record a loss.

The engineering company yesterday said it could post a loss of almost $5 million for the six months to June 30, a result that would push it nearly $10 million into the red for the full year.

Clough was tight-lipped about the name or location of the projects concerned but had previously flagged a break-even or small profit for the past financial year.

"This situation is not unusual in the industry. We hope it does not occur and we are being very pro-active in the resolution of these issues. The projects are progressing satisfactorily. The new risk management processes put in place in recent months are starting to show positive improvements," said Ross Kelly, chairman of Clough.

"The 30 June snapshot is what it is. If these delays do occur then the profit for these projects will be brought to account in the 2003-04 year. We still anticipate the company returning to profitability in the 2003-04 year."