Civmec

Civmec: 2QFY14 net profit slumped 35% to $6.2m in tandem with a 21% fall in revenue, taking 1HFY14 net profit to $14.3m (-22%). The lower top-line was impacted by slower than anticipated commencement of some secured projects, due to the late receipt of project details. Gross margins fell 4.2 ppt to 14.6% largely due to the nature and mix of contracts reported during the quarter, preliminary costs in anticipation of new projects commencing and the establishment costs of project support facilities in Henderson and Darwin. Going forward, the group remains confident of its prospects, back by an order book of $392m, while Tendering activities remain strong with a large amount of both capital and operational expenditure projects being tendered.