Matrix Composites & Engineering lifted its half-year profit by 29.4 per cent compared with the previous corresponding period, despite dropping 20.2 per cent in revenue.
The manufacturer and service provider to the offshore oil and gas industry made $65.1 million in revenue in the first half of this financial year, and reported earnings before interest, tax, depreciation and amortisation of $7.7 million.
Matrix chief executive Aaron Begley said the results were pleasing given its Henderson manufacturing facility achieved a lower production output due to some technically challenging projects and delays in project revenue recognition.
“It is a credit to our team that we have been able to achieve these results given the challenges faced in the first half of the 2014 financial year,” he said.
Mr Begley said Matrix was continuing to reduce its debt, following a statement by chairman Peter Hood last November that its business model had changed, so that a greater proportion of the company’s work was being done direct with shipyards rather than equipment manufacturers.
The change required the company to provide substantial bonding guarantees which adversely impacted its cash reserves.
“After some difficult trading periods, improved cash flow is being reflected in a strengthened balance sheet and increased production from the improved backlog should result in a stronger cash flow generation over the next 12 to 18 months,” he said.
Since the beginning of the year Matrix has been awarded $US30 million worth of contracts, giving it a total of $US118 million worth of work it has to deliver.
Mr Begley said a falling Australian dollar was having a positive impact on the company, which receives more than 75 per cent of its revenue from exports.
He said Matrix was also well positioned to capitalise on future growth opportunities from a continuing strong market outlook for its key products and services and increasing revenue for one of its products which has recorded its largest order intake so far.
Matrix shares have mostly gained value since December, after remaining below 75 cents in October and November.
Shares rose 5 per cent following Matrix’s half yearly profit result announcement, to $1.02.
