Laboratory services company ALS Limited (ASX:ALQ) announced a fall in revenue and profits in its FY2015 Results announcement on Thursday. Revenue for the full-year ending on 31 March 2015 fell 0.7 per cent to $1,492.7m compared to the previous corresponding period (PCP). Net profit after tax (NPAT) fell 213 per cent, from a gain $154.4m in the PCP to a loss of $174.5m. Basic earnings per share fell 84.1c to negative 43.4c per share. Total dividends for the year fell 46.2 per cent to 21c per share.
ALS said the primary cause for the profit loss was due to the $290.6m impairment charge on its oil and gas investments. The company said it was unprepared to deal with the rapidly falling global oil prices global. "Markets for our services remain challenging in an environment of falling commodity prices and a strong cost focus from most clients," said chairman Nerolie Withnall. The company was conducting a strategic consolidation to move into specialist oil and gas technical services. Between September 2014 and March 2015, the company saw oil prices fall 40 per cent. The integration of its new strategic consolidation was unprepared for the collapsing oil prices, and thus was impaired at a loss for ALS.
ALS provides geochemical and metallurgical testing services and mine site services, in addition to certifications for the coal, oil and gas industries. Like many other Australian businesses, the down turn in mining and commodity-focused industries has been extended to ALS. The final yearly dividend for the company has been cut in half to 10c per share, 2.5c franked. The interim dividend has been nearly cut in half to 11c per share, 9.9c franked. Shares of ALQ have fallen 43c, or 6.69 per cent, at $6.00 per share near the end of trading on Thursday. ALQ has fallen 29.65 per cent in the last 12 months but has risen 12.66 per cent so far this year.
Author: Simon Herrmann
May 28, 2015
Simon is a financial analyst at independent research firm Wise-owl specialised in small-mid cap growth opportunities and ethical investment opportunities. Simon's aim is to disrupt the cliché approach to investment decision making as he believes that socially and environmentally responsible behaviour is a necessity to long-term wealth creation. Simon has a deep fundamental understanding of the global financial landscape and has compiled 300+ research reports, valuations and corporate appraisals. Simon is commonly featured in major media outlets and his research is published weekly in The Australian.