4th Aug 2020 11:08
(Alliance News) - Rotork PLC on Tuesday reported a drop in revenue for the first half of this year but still announced a boosted interim payout.
The industrial flow control equipment manufacturer posted a pretax profit of GBP50.0 million in the six months ended June 30, down 4.3% from GBP52.2 million a year prior.
Rotork's revenue was down 11% in the half to GBP283.2 million from GBP378.6 million a year prior.
The company's order intake in the first half decreased 17% year-on-year to GBP300.5 million from GBP362.5 million. This reflected a sharp reduction in global economic activity, the strong comparative period and extreme volatility in hydrocarbon prices.
Rotork put its revenue decline down to the Covid-19 disruption to production facilities and site services. It did see increases through May and June, however.
The oil & gas division experienced very challenging trading conditions in the first half, the company said. Covid-19 related disruption impacted Asia Pacific activity in February before spreading to other regions of the world in subsequent months.
"The break-up of the Organization of the Petroleum Exporting Countries+ consortium in March resulted in volatility in hydrocarbon prices and in response many customers announced they would revisit their investment plans," Rotork said.
Oil & gas revenue dropped 13% to GBP137.2 million in the half to GBP158.1 million a year prior.
Water & Power however, saw an encouraging performance in the first half. Rotork said that, while the division was not totally free from Covid-19 related disruption in its products and services, its customers are generally considered essential. This meant activity largely continued without any significant delays.
Water & Power's revenue increased 5.9% year-on-year in the half to GBP73.2 million from GBP69.1 million.
Chemical, Process & Industrial saw mixed trading condition and posted a revenue decline of 20% to GBP72.9 million from GBP91.4 million a year prior. Rotork highlighted that in the Americas, industrial production was already slowing prior to the arrival of the pandemic.
The company said with regards to the Chemical, Process & Industrial division: "Whilst the outlook remains uncertain we are seeing some encouraging signs, most notably in Asia Pacific where our shipyard partners have won significant liquefied natural gas vessel construction orders and where key process industry customers are proceeding with expansion plans."
Rotork said after reflecting on the performance of the company in the first half, it has decided to pay an interim dividend 3.9 pence per share, up 70% from 2.3p a year ago. This comes after its decision to withdraw its 2019 final dividend.
The company's balance sheet remains strong having ended the period with net cash of GBP143.6 million, compared to the last half ended December 31 with a net cash of GBP106.1 million.
Chief Executive Kevin Hostetler said: "I am pleased to report that, thanks largely to the extraordinary efforts of all our people, Rotork delivered a resilient first half performance in the face of a challenging economic environment.
"We continue to make good progress on our strategic initiatives, bringing forward some actions that we had planned for the latter years of the growth acceleration programme and investing in our facilities."
Rotork shares were up 7.5% at 307.20 pence each on Tuesday morning in London.
By Greg Roxburgh; [email protected]
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