RCR forecasts lower profits, cuts jobs

The company did not specify by how many its staff had been reduced, but a spokesperson for RCR told CIN the majority of the reductions were in the eastern states and New Zealand. RCR said the reduced payroll would generate annualised cost savings of more than $2 million, and these benefits were expected to flow through from April 2009. However, RCR said the implementation of these initiatives will result in a charge of $1.3 million which will have an impact on the company’s full-year results.The company said that while its target of 15% revenue growth for the 2009 financial year was still on track, its net profit after tax was expected to be lower because of delayed or cancelled projects, restructuring costs around the reduction in RCR staff, general cost reduction initiatives and efficiency measures across the company.RCR said its Construction and Maintenance business unit has seen reduced demand within the mining sector, however this had been partially offset by growth in the oil and gas construction sector.The company said its core Engineering division experienced a severe downturn in operations on the east coast, due in particular to reduced expenditure in the quarry and pressure component industries. As a result, employee numbers have been reduced in its Queensland and New South Wales workshops. Positron, RCR’s electrical maintenance division, has also been impacted by economic conditions, as has the company’s Energy division, which comprises the Laser division, Heat Treatment and Boiler Service and Energy Projects business segments.

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