Opus says Canadian, Australian earnings hurt by oil, resources downturn

Opus International Consultants [NZX: OIC], the listed engineering firm, says the 2015 year is mixed so far, with earnings in Canada and Australia hurt by weak oil prices and a downturn in the resources sector respectively, while a buoyant economy is lifting New Zealand returns.

The company didn't give guidance for 2015 at its annual meeting in Auckland today, having boosted profit by 15 percent in 2014. Chief executive David Prentice said year-to-date performance has been mixed. "The level of economic uncertainty is a key consideration but our strategy of market diversification ensures we manage risk and leverage significant new opportunities," Prentice said.

"A more buoyant economy in New Zealand and substantial changes to the business have underpinned a good start to the year," he said. "New Zealand is improving and we have secured several long-term strategic projects, including the recent Huntly expressway."

Last year the company reduced its leadership team to eight from 12 as part of a response to what is called "an increasingly competitive market". The shares have declined 28 percent in the past 12 months and fell 2.1 percent to $1.40 today, although it is rated a buy based on four analysts polled by Reuters.

Prentice said the decline in the price of crude oil had dented earnings before interest and tax in Canada, which are down $2.5 million from the same period a year earlier, while the slowdown in Australia's resource sector "has put that business $2 million behind the prior year." As a result, Opus has "implemented a number of cost-saving and other measures in both territories and expect to see a positive impact in the second half of the year."

A strong economic recovery in the UK is helping lift its business along with securing 3.5 million pounds of work with Network Rail, he said.

(BusinessDesk)