Engineering group Bradken has reported a 15.2% drop in sales revenue in FY16, citing global softness and a lack of capital projects in mining, energy, and related service sectors.
Bradken on August 23 announced sales revenue of $819 million for FY16, down from $966 million in FY15.
Sales were down 30% to $228 million in Bradken’s mobile plant division. Mill liner sales were up 10% to $240 million. Fixed plant sales were down 19% to $110 million. And engineered product sales were down 26% to $227 million.
The 15.2% fall in total sales revenue translated to a 20.4% drop in underlying earnings before interest, tax, depreciation and amortisation, from $136 million in FY15 to $108 million in FY16, and a 13.0% drop in underlying net profit after tax, from $33.9 million to $29.5 million.
Directors did not declare a dividend in the annual result.
Despite the downward trend in those key figures, chief executive Paul Zuckerman was confident Bradken had made the best of a bad situation.
“We have achieved a solid full year result and delivered on targets set at the half year, despite continued subdued market conditions,” Zuckerman said.
“Earnings during the second half exceeded the first half as divisional revenues stabilised and Bradken executed on our disciplined approach to reducing overhead costs.”
Bradken is undergoing a realignment process, which Zuckerman says will refocus the business on two key sectors: mining wear parts for both mobile and fixed plant; and North American specialty castings, focused on energy, defence and industrial markets.
The realignment is the result of a strategic review which Zuckerman – who was appointed in March 2016 – says has put the business on a path to deliver shareholder value.
“The review highlighted the need to be selective with the business lines that will best utilise our core strengths,” the CEO said.
“We believe there is a significant opportunity to simplify the business into mining consumables and North American defence and energy, further reducing our exposure to cyclical markets.”