Chief executive officer David Singleton said it was a disappointing result for the company, driven primarily by its determination to take a prudent financial position on BassGas.
Singleton said Clough was, however, encouraged by progress made in several areas of the business. Subsidiary PT Petrosea and the Services and Property business units performed well, in-line with expectations.
Clough’s work-in-hand accumulated during 2004-05 was $A851.1 million, more than double the value of the previous year’s order book. Australia and South East Asia continued to be the company’s most profitable markets.
“At this time, the work-in-hand figures only included a minor contribution from the Saudi Aramco Project Management Services and Gorgon Front End Engineering Design contracts, which will open the way to revenue growth in the next few years,” Singleton said. “These and other engineering service projects will be fundamental for transforming the risk profile within the group.”
Profit in Clough’s Engineering, Procurement and Construction Management & Engineering Services was derived mostly from the oil and gas sector and totalled $A5 million. This was below the previous year’s figure but still ahead of the company’s internal expectations.
The segment’s results reflected strong growth in new contracts and Clough expects continued strength in the area.
PT Petrosea delivered an increased profit of $A6.8 million, derived from mining and mine services, and Clough says it continues to provide a regional outlet for its oil and gas activities.
Petrosea signed a new multi-year contract for the provision of mining services in Indonesia’s Kalimantan during the reporting period. Clough predicts future revenue growth will be supported by increasing mining activity and increasing oil and gas investment in Indonesia.
Group net assets decreased by $A27.6 million to $A185.1 million during 2004-05, including a $A6.7 million reduction in the value of assets held overseas, due to the appreciation of the Australian dollar. Net cash holdings at the full year were $A7.7 million, down $A34.1 million from the previous year.
During the year, the company generated $A40 million from an equity placement to Murray and Roberts Holdings Limited of South Africa. The resulting net cash outflow of $A74.1 million related substantially to the BassGas contract.
“Given the company’s loss and the working capital issues relating to the BassGas project, the board of Clough Limited has elected not to pay a dividend at the full year,” the company said.
