Clough Profit Spikes (Australia)

Clough Profit Spikes

Engineering and project services company Clough Limited today announced record financial results reporting NPAT from continuing operations of $73.9 million for the full year ended  30 June 2013, a 111% increase on the prior corresponding reporting period.

Total revenue was $1.51 billion, up 50%, and EBIT was $90.7 million, up 144%. EBIT margin increased to 6.0%, compared to 3.7% for the prior corresponding reporting period. Basic EPS from continuing operations was 9.5 cents, up 109% on the prior corresponding reporting period.

Following the announcement of a conditional proposal by Murray & Roberts to acquire all the outstanding shares in Clough that it does not already own at $1.46 cash per share (which includes the payment of a dividend of $0.14 per share), Clough has decided not to determine a final dividend at the present time.

Commenting on the results, Clough’s CEO and Managing Director, Kevin Gallagher said: “Clough has delivered record financial results for FY2013. Revenue growth was underpinned by our strong position in the LNG sector and increased demand for our full project lifecycle services.

“We were pleased to deliver improved shareholder value through significant earnings growth. Proactive austerity measures implemented to drive out cost inefficiency delivered over $10 million in operational savings, while a group wide focus on project execution excellence and enhanced productivity resulted in improved operational performance and contributed to the earnings growth.”

Operations:

Clough’s order book has been maintained at $2.3 billion, augmented by new contracts and contract extensions.

Core business divisions recorded EBIT growth and improved EBIT margins compared to the corresponding reporting period, with Engineering up 48% to $72.9 million, Projects up 67% to $57.6 million, and Commissioning and Asset Support up 109% to $11.1 million.

An agreement to sell the Thailand fabrication business was executed on 20 August 2013 and the transaction will complete in H1 CY2014 following the completion of the contract with Pearl Oil (Amata) Limited.

Safety performance improved, with lost time injury rates declining by 7% and total recordable injury rates declining by 14%. While Clough’s safety record is Australian industry leading, the group continues to implement innovative behavioural based safety programs to drive a workplace that operates free of injury or incident.

Workforce numbers increased by 33% to 6,343 people, driven by the ramp up of CSG projects in Queensland, and the continuation of work on three major contracts for ExxonMobil’s PNG LNG project, where Clough employs a predominantly local workforce of over 3,000 people.

Leadership was strengthened with key appointments, including Rick Robinson as Executive Vice President of Projects, Geoff Bird as Vice President of Strategy and Commercial, and Peter Hayward as Vice President, HSE. Succession planning and talent development programs continue to bolster Clough’s pipeline of future leaders, from graduates to executives.

In response to industry demand, Clough is investing significantly in technology and systems to improve productivity performance. This includes proprietary software to enable real time project reporting. Productivity programs will be progressively implemented on Clough’s projects in the coming year to eliminate cost and schedule overruns and set the industry benchmark for productivity performance.

Outlook

Clough enters FY2014 in excellent shape with secured revenue of approximately $800 million for H1 FY2014 and $1.4 billion for FY2014. Clough has secured revenue of $705 million for FY2015.

Commenting on Clough’s outlook, Kevin Gallagher said: “We remain confident about the long-term outlook for Clough. Our focus on excellence in project execution and enhanced productivity will continue to deliver superior value to our clients and drive order book growth.”

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LNG World News Staff, August 21, 2013