AusGroup's net profit plunges 40.1% to $198.8m

Blame it on skyrocketing impairment charges.

Singapore-listed AusGroup swings into red as it winds up its financial year, with a reported net profit decline of 40.1%, posting a loss of A$193.2 million ($198.8 million).

The group's bottomline were affected by goodwill impairment charge of A$2.5 million, impairment of property at A$52.3 million, and intangible asset impairment of A$29.1 million.

"The impairment review performed over the Fabrication business units also resulted in
the full impairment of the carried goodwill balance in the Singapore Fabrication business of AU$2.5m in 3Q FY 2016," the group said in its statement

The group admitted that as of the quarter ending in June, it has been in breach its requirement to maintain a minimum net worth position as well as thresholds to cover interest payment as required under all DBS banking facilities and the Trust Deed of the Notes.

"At the reporting date, the Group had obtained a waiver for this breach from DBS Bank Limited, however negotiations with the Noteholders remained ongoing," AusGroup explained

The group added that it will be seeking for funding alternatives available including the renegotiation of its facilities to extend the planned repayment terms, disposal of assets and raising capital through share placements or rights issues.