Neptune Reports Disappointing First Half Result (Australia)

Neptune Marine Services Limited has reported a statutory operating loss before tax of $21.952m (Dec 2011: profit $1.840m), the consolidated loss of the Group after providing for income tax amounted to $22.446m (Dec 2011: profit $1.278m).

The group suffered a downturn in revenue in the first half with revenues dropping from $60.593m in December 2011 to $41.682m in the current half, and this drop in revenue has been the main driver of the operating losses for the six month period.

Despite the losses, the Group recorded a positive operating cash flow during the period of $2.124m.

This enabled the Group to continue to invest in new equipment ($1.416m) and repay debt. As at 31 December, interest bearing debt is down to only $0.313m. The working capital position remains strong with a ratio of Current Assets to Current Liabilities of 2.79 and in general, the Balance Sheet remains in a sound position.

The Group has also continued to make progress on reducing overhead expenditure with Corporate, Shared Services and Board expenses dropping by 31% compared to the corresponding period in 2011. Savings on personnel costs represent the biggest portion of these savings with these costs dropping from $5.221m to $3.934m.

Neptune Chief Executive Officer Robin King said: ‘The first half result was disappointing although encouragingly, cash flow from operations was positive and we continue to make headway on reducing the overall cost structure of the business.

“Looking forward, the next quarter is expected to be stronger with significant diving and ROV work to be performed.

The strategy of geographic expansion remains in place with the Group obtaining work in the Bass Strait region and Gladstone. The takeover of the Group by MTQ Corporation (via Blossomvale Investments Pte. Ltd.) also gives us some opportunity to leverage off their abilities in the Asian region. All these activities are designed to give the Group a stronger and more robust revenue base. “

Neptune is also progressing with changing its financial year end to 31st March to coincide with the financial year end of MTQ Corporation Ltd.

The MTQ Corporation Ltd takeover bid has been extended to 5 April. The Directors have recommended that shareholders accept this bid and the independent expert concluded the offer was fair and reasonable, and therefore Neptune would encourage those shareholders who haven’t yet accepted the bid to be aware of the closing date of the offer and consider the documentation that has been provided in relation to the offer.

[mappress]
Press Release , March 01 , 2013