Opus annual profit slips on rising tax, interest costs; trims dividend as debt mounts

David Prentice
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Opus International Consultants [NZX: OIC], the engineering firm with one of four mandates to lead design the Christchurch rebuild, reported a 2.6 percent decline in annual profit as it dealt with rising interest costs and a bigger tax bill, and trimmed its dividend payment while taking on more debt in the year.

Net profit fell to $22.8 million, or 15 cents per share, in the 12 months ended Dec. 31, from $23.4 million, or 16 cents, a year earlier, the Wellington-based company said in a statement. Opus's interest costs rose 28 percent to $3.7 million in the year, while its tax expense climbed 36 percent to $10.2 million. Revenue rose 12 percent to $462.9 million.

Earnings before interest and tax gained 14 percent to $34.3 million, ahead of First NZ Capital's forecast EBIT of $31.8 million.

"Despite ongoing constraints on local government spending, business confidence is rising sharply and indicators point to a range of opportunities in the marketplace," chief executive David Prentice said. "We need to be nimble and astute to ensure we realise these while also driving continuous, improvement in all aspects of the business."

The board declared a final dividend of 3.9 cents per share, payable on April 1 with a record date of March 18, down from 4.9 cents a year earlier. That takes the annual return to 7.9 cents, below First NZ's forecast of a 9-cents-per-share dividend.

The bigger retention of earnings lifted Opus's equity to $134.2 million as at Dec. 31 from $122.8 million a year earlier, keeping a lid on the company's gearing which rose as a result of its acquisition of Canada's Stewart Weir last year.

Opus's debt to equity ratio rose to 149.7 percent as at Dec. 31 from 109 percent a year earlier. The company had total liabilities of some $201 million as at Dec. 31, from $133.8 million at the end of 2012.

The company's shares fell 3.3 percent to $2.08 today.

Opus's New Zealand unit reported a 1.1 percent lift in revenue to $285.5 million while EBIT fell 12 percent to $26.9 million. The UK unit boosted sales 59 percent to $39.2 million, and turned profitable on an EBIT basis with earnings of $635,000.

The Australian business showed a 3.3 percent fall in sales to $75.9 million, while turning an EBIT profit of $656,000 compared to a loss of $897,000 a year earlier. The Canadian unit, which incorporated the new Stewart Weir business, more than doubled sales to $58.9 million, while EBIT surged 375 percent to $6.1 million.


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