Casting Supplier Bradken Delivers Increase in Profit

13 Feb 09

ManufactureLink supplier, Bradken Ltd, a supplier of equipment, services and metal castings to the rail and mining industries, has cut its interim dividend despite delivering an increase in first half profit.

Net profit during the six months to December 31, rose 50.5 per cent to $34.93 million buoyed by acquisitions and higher sales from its mining and industrial divisions.

Bradken will pay an interim dividend of 10 cents per share, down from the previous corresponding period's 15 cents, due to "uncertainties in world financial markets".

The company said it was prudent to conserve cash given the current uncertainties in the market and likely future volatilities.

"The dividend is lower, but the board unanimously thinks it is appropriate," Bradken managing director Brian Hodges said on a conference call.

Bradken said the dividend reinvestment plan would be in operation for the interim dividend with a discount of 2.5 per cent and would be fully underwritten.

The company has also set about reducing its workforce, axing about 100 positions in Australia, and cutting its planned capex spend in the second half with further "significant" reductions forecast for 2010.

"We downsized up in North Queensland where we're focused on sugar and general engineering, (and) we've pulled back a little in Western Australia," Hodges said.

Bradken said the second half of the year would be affected by destocking and order cancellations, while the outlook for the 2010 financial year was unclear due to the changing nature of global markets.

The company expects its mining consumables business to be slightly down in the second half compared with the first half.

Bradken is forecasting sales from its engineered products divisions to be down at least 20 per cent due to weaker demand from the rail, mining and construction markets.

The company delivered a 73.7 per cent increase in revenue for the period to $625.69 million and a 69 per cent rise in earnings before interest, taxes, depreciation and amortisation (EBITDA) to $90.7 million.

The was underpinned by strong growth in mining consumable sales, five months of trading from the Engineered Products Division (formerly AmeriCast Technologies) and a full six months trading from the Cast Metal Services (CMS) acquisition.

Source: Bradken

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