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Opus International sinks into the red

NZ Newswire logoNZ Newswire 2/02/2017 Paul McBeth

Opus International Consultants has sunk into the red as a struggling oil and gas sector weighed on the engineering firm's Canadian business, triggering more impairment charges.

The Wellington-based company reported a loss of $29.9 million in calendar 2016, compared to a profit of $16.7m a year earlier, it said in on Thursday.

The engineering firm wrote down the value of its Canadian Stewart Weir assets by $33.2m and its Australian division by $4.4m in the year, two segments it has previously cited as struggling.

Revenue fell 6.8 per cent to $470.9m, led by a 30 per cent slump in sales from its Canadian division, which chairman Kerry McDonald said was "hard hit by low oil prices and the resulting collapse in oil industry work".

That downturn, which also weighed on the Australian business, prompted Opus to restructure its businesses last year along sector lines rather than country-based divisions to try to draw on staff expertise across borders.

Staff wages fell 3 per cent to $278.3m, with Canadian employee remuneration down by a fifth to $50.2m.

"Our new global strategy focuses on enhancing capability in proven areas of expertise, and better collaboration across the key global growth sectors of transportation, buildings and water," chief executive David Prentice said.

"We are increasing the effectiveness of our excellent talent and providing clients with integrated engineering and wider solutions, regardless of where they are located."

The shares fell 2.1 per cent to 93 cents.

The engineering firm's operating cash flow shrank 22 per cent to $14.4m in the year and net loan repayments of $44.2m left it with cash and equivalents of $30.1m, from $59.8m a year earlier.

The company's New Zealand operation maintained earnings before interest and tax at about $36.9m on a 1.2 per cent increase in sales to $279.8m.

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