Opus International first-half profit rises 6% on Canada contribution

Opus International Consultants New Zealand chief executive David Prentice
Opus International Consultants 12-month price history (NZX.com)

Opus International Consultants [NZX: OIC], the engineering firm, reported a 6 percent gain in first-half profit, reflecting the contribution from the Stewart Weir business acquired in 2013, which drove a jump in earnings in Canada.

Profit rose to $9.9 million in the six months ended June 30, from $9.4 million a year earlier, the Wellington-based company said in a statement. Revenue jumped 25 percent to $265 million million. The shares fell 6.6 percent to $1.70 after the results, which were just shy of First NZ Capital's profit forecast of $10 million.

Opus agreed to pay as much as C$90 million for engineering and environmental advisers Stewart Weir last year, including C$40 million of performance-based payments. The acquisition made Canada the company's second-biggest market after New Zealand, where Opus has one of four mandates to lead design the Christchurch rebuild.

Total revenue from North America, mainly Canada, climbed almost four-fold to $57 million, and earnings before interest and tax jumped 289 percent to $3 million, of which $2.3 million was the Stewart Weir contribution. The result includes a fair value gain on financial liabilities related to the Stewart Weir acquisition.

In New Zealand, revenue rose about 5 percent to $147.9 million while Ebit declined 5 percent to $11.2 million in what the company described as "variable market conditions."

"We retain a strong position in Christchurch and have secured significant new contracts such as the five-year Wellington Region Network Outcome contract for the NZ Transport Agency," chief executive David Prentice said.

Revenue in the UK climbed 41 percent and earnings rose 45 percent to $400,000, which Opus said reflected an improving UK economy, a long-term contract with the Hertfordshire County Council and a strong performance from contracts related to Network Rail.

In Australia, revenue fell 18 percent to $33 million, for an Ebit loss of $193,000, which it attributed to a general slowdown in the infrastructure and resource sectors."

The company will pay a first-half dividend of 4 cents a share, fully imputed.


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