Engineering and project management group Ausenco has posted a first half net loss and says long lead times, restructuring initiatives and a strong Australian dollar hurt its bottom line.
Ausenco reported a first half loss of $19.02 million in the six months to June 30.
That was down from a profit of $12.16 million in the first half of 2009.
Revenue fell to $219.57 for the half, down 8.8 per cent from a year earlier.
The Group says its $8.1 million loss in underlying earnings for the half reflects difficult market conditions and a strong Australian dollar.
Ausenco chief executive Zimi Meka said the first half was challenging, with longer than anticipated lead times to project commitment affecting results.
"Factors contributing to this loss include longer than anticipated project commitment delays, a relatively strong Australian dollar and the investment in strategic growth initiatives," he said in a statement on Wednesday.
"We invested $18.9 million in a number of one-off initiatives as part of our strategy to build for long-term growth."
That included rebranding and office rationalisations at a cost of $6.1 million.
In outlook, Ausenco says it expects growth into 2011, as it benefits from strategic growth initiatives implemented in the first half.
"We remain confident of the strengthening outlook over the medium to long term for the sectors in which we operate," Mr Meka said.
"During the next twelve months, we are expecting clients to make decisions on some of the best and largest project opportunities in our history. We remain confident of winning our share."
Mr Meka said the first six weeks of the second half had shown improvement in Ausenco's work backlog, modest improvement in utilisation rates and encouraging signs of the conversion of new work opportunities.
"Market fundamentals are improving, demand for commodities is stronger, clients are beginning to spend money on large projects again and we are experiencing record levels of project and tender opportunities," he said.
Mr Meka said South America would continue to be a strong market for the group.
"South America is expected to be one of the highest growth regions over the short to medium term.
"All of our offices in this region have strong project opportunities that will underpin our growth," he said.
Ausenco says it will not pay an interim dividend.
AAP