WDS Limited
(ASX:WDS) is in the final stages of completing its accounts for the six months to 31 December 2013 which indicate a stronger trading performance than originally anticipated, both in terms of cash flow generation and net profit. Although updated forecasts for the year are yet to be finalised, performance to date is such that our net profit after tax guidance for the year to 30 June 2014 has now been increased from $10-12m to $12-14m. This represents a potential increase of 45-70% on the previous year’s reported profit of $8.25m, delivering earnings per share of 8.3 - 9.7 cents.
Strong margin growth in the Energy Division has been the primary driver of the Group’s performance in the first half although we expect that margins from that business will moderate in the second half. The operating environment in the coal sector continues to be particularly challenging which has impacted on the Mining Division’s contribution to the group during this period with little expectation for improvement in the remainder of FY14.
Full details of our first half earnings and second quarter dividend will be announced to the market on 26 February 2014.
