METS

DRA looks ahead after half-year loss

WHILE DRA Global posted a net loss of A$16.9 million dollars for the first half of 2022, the engineering house is confident its fortunes are set to turn.

DRA looks ahead after half-year loss

Legacy fixed price contracts DRA's Australian G&S construction and maintenance business played a big part in that loss.

Those contracts were terminated and the claims associated with that paid out, which brought some financial pain.

The issues in the Australian business were partly to blame for the civil war that erupted at the head of the engineering house.

One of the consequences was the loss of DRA managing director and CEO Andrew Naude.

He has been replaced on an interim basis by James Smith.

However, the Takeovers Panel ordered, after looking into the infighting, that Smith, Alistair Hodgkinson, Darren Naylor and Brian Dowding be banned from being DRA directors for six months. Those bans should expire by the end of the year.

The company also officially appointed Michael Sucher as chief financial officer, effective from September 1.

He has been acting in the role since May.

The search for a permanent CEO is ongoing.

On the plus side, the company has a backlog of $640 million and a project pipeline of $635 million.

"As expected, our business in the EMEA [Europe, Middle East and Africa] and AMER [Americas] regions continue to show strong and steady performance and we expect our refocused APAC [Australia-Pacific] business to become profitable during H2 FY22 following the divestment of the non-core G&S business, which is anticipated to be completed in September 2022," Smith said.

"Additionally we successfully resolved two major disputes that arose prior to the group's initial public offering [in July 2021].

"Together with progress towards resolving the residual fixed-price construction contracts and planned divestment of the G&S business, the group has a platform to deliver a profitable second half.

"Notwithstanding the financial impact of the legacy fixed-price construction contracts in APAC, our global growth strategy continues with a strong focus on the core engineering, procurement and construction management and operations and maintenance businesses in all regions."

On the financial front revenue for the first half of FY22 was $477.1 million, down 16% on the $569.3 million recorded in the first half of FY21.

Earnings before interest, tax and amortisation was down $150% on the first half of FY21 to a $14.9 million loss.

DRA finished the first half with net cash of $72.5 million, down 39% on a year ago.

During the half the company completed the first of two phases of its updated operating model following a review.

It believes its updated operating model brings several immediate benefits including:

  • Clarity of accountabilities to support improved performance and collaboration;
  • Business units being appropriately empowered to operate within the group's governance, risk and compliance frameworks; and
  • Providing a platform to optimise overhead cost structures.

The second phase of the review is underway and focused on aligning the corporate functions and business units and embedding the model across the group.

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