Civmec's net profit falls 77.4% to $88.4 million

Blame it on the weaker Australian dollar.

Construction and engineering services provider Civmec has reported a major slip in its net profit for the quarter ending in June 2016 due to the Australian dollar's decline against the Singaporean dollar.

Civmec is an Australian based company listed on the Singapore Exchange mainboard.

For the 12 months ending the previous quarter, its revenue was weighed down 20.5% to $396.8 million from a strong S499.2 million the previous year.

"Compared to the three months ended 30 June 2015 (“Q4 FY2015”) revenue for Q4 FY2016 declined 22.9% to S$88.4 million from S$114.7 million partly due to a decline of approximately 10% of the Australian dollar against the Singapore dollar over the respective periods," the group said in its quarterly report.

The group's revenue for the Oil & Gas sector declined 38.2% to $90.7 million, reflecting the still challenging market conditions.

"Opportunities for new major construction contracts in the oil & gas sector are likely to
remain at reduced levels, however prospects for maintenance and industrial services are positive," the group stressed.

Looking forward, Civmec said it will focus on initiatives aimed at reducing cost to protect margins and improve sustainability.

"Civmec remains committed to advancing its long term growth strategy and diversification of revenue sources. The Group will continue to strengthen its position in growing infrastructure and defence markets in Australia. Geographical diversification initiatives will remain a focus," the group stressed.