The Courier-Mail

Struggling UGL lowers hopes and axes jobs

- EVAN SCHWARTEN

UGL will axe 200 jobs within a month and has downgraded its full year guidance, capping off a tough 12 months for the engineerin­g group.

The company said the job cuts by the end of June would save $33 million next year.

UGL lowered its full year revenue guidance by $100 million to $2.3 billion and flagged a fresh hit to its full year profit in the form of another $74 million in writedowns.

The job cuts and weaker guidance come at the end of a strategic review of UGL’s operations commission­ed by new chief executive Ross Taylor, following the $1.2 billion sale of its property business in November.

UGL’s transition to a pureplay engineerin­g group has come at a tough time due to the downturn in investment in the resources sector.

The company posted a first half loss for the six months to December 31, of $122 million, due chiefly to writedowns related to work on a power station at the Ichthys LNG project in the NT.

UGL’s announceme­nt yesterday was well received by investors, who cheered an improved outlook for the next two financial years.

Mr Taylor said while revenue would likely be flat in the 2015-16 year, cost cutting efforts should boost its earnings.

“A significan­t amount of work has been undertaken to reposition UGL for its future and I am confident from FY16 we will deliver improved profitabil­ity,” he said.

IG market strategist Evan Lucas said despite the weak guidance for this year, the outlook was strong enough to buoy investors after a difficult few years for the company.

UGL shares rallied 24¢ or 10.3 per cent to $2.56.

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