Watpac Limited
(ASX:WTP) has downgraded its profit guidance to between $3 million and $9 million, a fall on the $15.3 million posted last year.
The group says its statutory result is likely to range between a $5 million loss and a $1 million profit after tax, following $8 million in property impairments.
The company says the revised forecast was mainly due to execution issues in Watpac’s civil operations in Queensland and Victoria and the expected costs associated with the consolidation of the operations.
But Watpac says its national contracting operations in construction and mining, and its civil operations in Western Australia continue to perform strongly despite growing competition and tightening margins in the sector.
Since flagging a change in its strategy to sell non-core properties, the group has settled or entered into unconditional sales agreements totalling almost $120 million.
Watpac generated a net profit of $1.26 million for the first half of the current financial year.
