The results, for the six months to December 31 2007 showed that net profits after tax fell 22% to AUD15.3m, from AUD19.6m in the first half of 2007. The fall in net profits came on a 19% increase in revenues, from AUD170.4m in H1 2007 to AUD202.4m in H1 2008.
Previously, the company had warned that a decrease in profits was likely, due to severe weather conditions in Queensland, where the company does almost a third of its business. The company said that continued severe weather in the area, and in particular in the Bowen Basin, is likely to further impact earnings in the second half of 2008.
In a press statement, the company said that reported net profits after tax were likely to be reduced by a further AUD2.9m, as asset depreciation costs related to the firm’s acquisition of Sheridan Hire in August 2005. The firm said that “The accounting adjustment is a one-off charge that predominantly relates to rectification of the underestimation of depreciation charges related to assets acquired in the August 2005 purchase of Sherrin Hire. Assets were transferred to the Company’s fixed asset register at the correct independent valuation but ‘useful lives’ were incorrectly set at this time.”
The release goes on to quote Boom chairman John Robinson, who sought to insure investors that the adjustment was a one-off, and final, correction: “We have dealt with the issue exhaustively. It will impact this result and force the revision of past performance. But it will not negatively impact on Boom in the future.”
The company said it would seek to reduce its fixed costs, make cost recovery adjustments to existing contracts, consolidate its process and business systems, and improve the utilisation of its equipment. It has recently appointed a national fleet manager to work on increasing the efficiency of its fleet.
Lawrence’s resignation was announced on 1 February, shortly before the company’s interim figures were reported.
