19th Mar 2014 08:02
LONDON (Alliance News) - Cape PLC Wednesday said it swung to a pretax profit in 2013 despite a reduction in revenues as lower charges helped company finances during the period.
The energy and natural resources engineering technology company posted a pretax profit of GBP200,000 in 2013, compared with a pretax loss of GBP143.2 million in 2012, when the company was hit by a major divestment charges as it streamlined operations which reduced overhead costs by more than 50%.
However, the company said revenue fell 5.4% to GBP697.1 million in 2013 from GBP737.0 million the previous year, as the completion of a number of major projects in the first half, such as Kipper Tuna in Australia and Cape's SPT project in Singapore, along with weak market conditions in Kazakhstan and Asia Pacific, hit the company.
The firm said a large amount of the revenue loss was offset by significant growth in its Middle East and UK offshore markets.
Cape noted that it was hit by an exceptional items charge of GBP15.5 million during the period as the company identified a challenging project in Qatar, for which it took an onerous contract provision, but this is significantly lower than GBP150.4 million in charges the previous year.
The company also noted that major new capital investment programmes in the oil and gas and mining industries were delayed during the period and, as anticipated, this resulted in lower activity levels of construction services in a number of its markets.
However, the company said the volume of construction service contract awards is expected to increase in late 2014 and 2015 as a number of new oil and gas projects reach the stage of development where Cape's services are required.
Cape said that its full-year dividend would remain flat at 14.0 pence after announcing a flat final dividend of 9.5 pence.
The company added that it is confident on continued improvement in operating performance and future prospects of the firm, showing confidence that the firm will deliver long-term value creation to its shareholders.
Cape shares were down 3.8% at 308.00 pence at the open Wednesday.
By Tom McIvor; [email protected]; @TomMcIvor1
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