Parent firm Engenco suffers turbulence on range of levels
Engineering firm Engenco has seen its first half net profit after tax (NPAT) plummet compared with the previous first half due to a range of added costs and contract completions, with trailers subsidiary Convair Engineering also feeling the pain.
Group NPAT for the six months came in at $3.6 million, down from the previous first half of $6.8 million, despite revenues rising from $88 million to $89 million.
“The lower comparative profitability, despite the strong performance of the group’s rail business, reflects the impact of expansion and restructure costs of over $1.0 million, margin erosion on imported parts and the timing of a large workforce contract completed over previous periods,” Engenco explains.
Of the variances in the results, particularly on gross earnings, the company points to reforms in lease accounting standards
Convair’s net profit before tax (NPBT), the group’s preferred bottom line for subsidiaries, was $281,000, down from $610,000 in the previous first half, on revenues of $7.647 million, down from $7.947 million previously.
“Convair Engineering reported slightly lower revenue and earnings,” the company says.
“While demand for dry bulk goods tankers remained buoyant, competition increased.
“Convair in part relies on imported aluminium equipment and was unable to pass on additional foreign exchange costs.
“The business continues to focus on production efficiency improvement, and on the development of new and innovative bulk materials transport equipment.”
Group MD and CEO Kevin Pallas also saw reasons for trailer-maker’s soft performance.
“The Convair business performed satisfactorily in a difficult market,” Pallas says.
“Notwithstanding the lower Australian dollar, competition from imported products contributed to lower margins.”