Round Oak woe impacts Soul Patts

WASHINGTON H Soul Pattinson’s full year profit has slipped 7.1 per cent to $247.9 million after flooding and start-up costs drove its Round Oak Minerals subsidiary to a large loss.

Metals producer Round Oak’s loss widened from $9.7 million to $54.1 million for the year to July 31 as the impact of start-up expenses and increased corporate overheads was compounded by delays stemming from this year’s North Queensland floods.

Elsewhere, income from a 25 per cent stake in TPG Telecom fell 12.8 per cent on the NBN rollout and the telco’s

costly decision to scrap construction of a mobile network.

Nonetheless, Soul Patts, which also holds stakes in coal miner New Hope, Brickworks and Australian Pharmaceutical Industries, said revenue from continuing operations grew by 38 per cent to $1.62 billion.

Chairman Robert Millner said regulatory issues across several of its major investments had proved frustrating.

“After 12 years, New Hope continues to await approval for its New Acland extension, TPG is before the Federal Court seeking approval for its merger with Vodafone, and Brickworks continues to be impacted by the higher gas and energy prices in Australia,” Mr Millner said on Thursday.

Income from a 43.8 per cent stake in Brickworks rose 22.9 per cent, loans and equity portfolios income rose 63.3 per cent, and financial services income grew 28 per cent to $23.5 million. Soul Patts said regular profit after tax – which strips out things such as impairments, acquisition costs, and onerous contracts – was down 7.2 per cent to $307.3 million.

Nonetheless, the firm lifted its fully franked final dividend to 34 cents per share from 33 cents a year ago, bringing the total dividend for the year to 58 cents.

“We remain cautious about high asset prices and peak economic conditions, however, continue to be actively interested in sectors we believe will have long-term attractive investment fundamentals,” managing director Todd Barlow said.