VDM expects drastic drop in profits

Rio Tinto’s Argyle diamond mine in the Kimberley In its interim earnings update, VDM said it expects its profit after tax for the six-month period ending December 31, 2008 to be in the range of $A3-3.5 million, compared with $11.2 million for the six months ending December 31, 2007.VDM chief executive officer John Farrell said the expected result was disappointing.“However, the second-half performance is expected to be stronger based on current tendering expectations,” he said.Farrell said while the company has increased revenue to around an expected $220-240 million, profits were down.“Earnings have been materially impacted on a number of challenging construction contracts and reduced margins.”VDM announced in December that it had been impacted by Rio Tinto’s global review, resulting in a loss of around $15 million in revenue.Argyle Diamonds sent the company a notice of variation, reducing the scope of work on the Argyle underground expansion. VDM will release its half-year results on February 27.VDM is structured into three operating divisions – Consulting, Construction, and Resources and Infrastructure – and has operations in all Australian states as well as in Vietnam, the Middle East and India.

Send this to a friend