Bradken eyes Chile merger to position for mining lift
Global engineers seeing red over hit to goodwill
MINING servi- ces group Brad- ken is preparing g for a turnaround in the sector as it t weighs up a merger proposal l in the wake of a $240 million loss.s
Bradken has until the end of the month to decide whether to merge with Chilean outfit Magotteaux Group.
The company’s revenue has fallen sharply after it merged four of its businesses, closed underperforming manufacturing facilities and recorded writedowns related to a drop in demand.
Managing di director Brian H Hodges said he ha had positioned th the company to gainga volume whenw the marketke improved.
“The company’s short-term strategy is to focus on growing high-margin revenue through market share for consumable products and product development in preparation for an eventual uplift in global mining demand,” Mr Hodges said.
A dividend would not be paid. Shares in Bradken rose 1.4 per cent to $1.125. ENGINEERING and construction group WorleyParsons is likely to slide into the red as it takes a $200 million hit in challenging conditions.
The company has flagged the massive non-cash writedown of goodwill assets after a review of carrying values.
“This comprehensive review will reflect the expected ongoing challenging market conditions and will be finalised around the time of the full year results release,” WorleyParsons said.
The anticipated writedown represents about 10 per cent of the value of its goodwill, which is a valuation of a company’s reputation and brand. WorleyParsons said in May its earnings during the second half of 2014-15 were likely to be about 50 per cent weaker than the first half profit of $104 million.
It has employees in 46 countries and has axed 6000 jobs since 2013, mostly in North America’s oil and gas sector.
The global company, which announced 2000 job cuts in May after a drop in oil prices, has previously said job cuts and downsizing would save $75 million to $100 million a year from 2015-16.
Shares were down 3 per cent or 26¢ at $8.43, yesterday afternoon.