NRW Annual Report 2014
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Transcript of NRW Annual Report 2014
Dr Ian Burston
Executive Director and Chief Executive Officer
181 Great Eastern Highway, Belmont WA 6104
T +61 8 9232 4200 F +61 8 9232 4232 E [email protected]
Deloitte Touche Tohmatsu, Level 14 Woodside Plaza
240 St Georges Terrace, Perth WA 6000
Link Market Services Limited, Level 4 Central Park
152 St Georges Terrace, Perth WA 6000
T +61 1300 554 474 F +61 2 8287 0303
NWH NRW Holdings Limited
Fully Paid Ordinary Shares
CHIEF EXECUTIVE OFFICER YEAR IN REVIEW
ACTION DRILL & BLAST
ACTION MINING SERVICES
HEALTH, SAFETY AND ENVIRONMENT
FINANCIAL YEAR REVIEW
CORPORATE GOVERNANCE STATEMENT
AUDITORS INDEPENDENCE DECLARATION
CONSOLIDATED STATEMENT OF PROFIT AND LOSS AND OTHER COMPREHENSIVE INCOME
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
CONSOLIDATED STATEMENT OF CASH FLOWS
NOTES TO THE FINANCIAL STATEMENTS
INDEPENDENT AUDITOR REPORT
NRW ANNUAL REPORT 20144 NRW ANNUAL REPORT 2014
ContentsNRW ANNUAL REPORT 2014 5NRW ANNUAL REPORT 2014
DR IAN BURSTON CHAIRMAN
NRW Holdings Limited
It is with great pleasure we present NRW Holdings Limiteds 2014
annual financial year report. The past 12 months have seen NRW
undertake our largest projects to date and the company has
achieved a solid result for the year ended 30 June 2014.
The groups Net Profit After Tax (NPAT) was $44.2 million on revenue of $1.1 billion. Divisional
revenue was $842 million from Civil, $187 million from Mining, $110 million from Action Drill &
Blast and $28 million from Action Mining Services.
The Board remains committed to achieving consistent financial performance year-on-year in
order to deliver value to its shareholders. Despite challenging market conditions, the group
delivered a strong cash result contributing to a significant debt reduction of $54.6 million in
the year. The net debt position at year end of $34 million results in a gearing ratio of 9.1%,
the strongest balance sheet position since listing in 2007.
NRWs focus on safety has once again been further evidenced by another outstanding
safety result and the Board commends our employees on their commitment to continually
improving safety across the organisation. Particularly pleasing was the 56.8% improvement
in the groups Total Recordable Injury Frequency Rate (TRIFR) to 2.36.
As NRW enters its 20th year of operations, I would like to thank all of our employees for their
efforts throughout the year and our leadership team for their contribution to the business.
During those 20 years NRW has made a significant contribution to communities in which we
work, particularly in the area of indigenous engagement.
From humble beginnings as a small business with only a handful of machines, NRW has
grown to be one of the most respected contractors in the civil construction and mining
industries. This success would not have been possible without our employees and the
quality of the work they undertake. I congratulate them on the high standards achieved and
the positive culture they embrace across all operations.
Chairmans Letter NRW ANNUAL REPORT 20146 NRW ANNUAL REPORT 2014
From humble beginnings as a small
business with only a handful of machines,
NRW has grown to be one of the
most respected contractors in the civil
construction and mining industries.
Chairmans LetterNRW ANNUAL REPORT 2014 7NRW ANNUAL REPORT 2014
It was pleasing to report revenues
of $1.1 billion for the year in line
with guidance despite challenging
CEO: Year in Review NRW ANNUAL REPORT 20148 NRW ANNUAL REPORT 2014
I present to both our shareholders and stakeholders the results of
NRW Holdings Limited for the financial year ended 30 June 2014.
NRW reported Revenue of $1.1 billion and net after tax profits (NPAT) of $44.2 million
both lower than the same period last year (Revenue of $1.4 biillion and NPAT of $74.1
million). The reduction in business activity reflects the completion of a number of
expansion programs undertaken in iron ore and within a challenging market environment
particularly in the contract mining coal sector.
The companys balance sheet continued to strengthen through the period with both cash
balances and debt improving in the year to $155.5 million and $189.5 million respectively.
Net debt reduced in the year by $54.6 million to $34 million reflecting strong cash flows
from operations and lower Capex.
Profit before tax (PBT) of $51.2 million was down on the same period last year reflecting
lower activity across the business and an impairment expense ($4.8 million) further
details of which are provided below. The full year effective tax rate at 14% reflects
income tax and R&D credits. Net interest expense for the year was at a similar level to
the previous financial year at $14.3 million.
With a refresh of the A Safe Day. Every Day Program, the company experienced
continued improvement and focus on safety performance across the business, sustaining
a positive trend. This is reflected in the Lost Time Injury Frequency Rate (LTIFR) currently
at 0.17, which represents a 69.1% decrease from the previous year (FY13: 0.55). The
groups Total Recordable Injury Frequency Rates (TRIFR) is industry leading and at 30
June 2014 is at 2.36, 56.8% less than the prior corresponding period (FY13: 5.47).
Chief Executive Officer Year in review
Revenue of $1.1 billion
EBITDA $123.0M, 10.8% of revenue
EBIT of $65.5M; NPAT of $44.2 million
Strong cash position of $155.5 million
Net Debt $34.0M a reduction of $54.6 million
Order book maintained at $1 billion
Final fully franked dividend
- 5 cents per share (9 cents for the full year)
- Payout ratio 57.0%
Net Debt / Equity at 9.1%
CEO: Year in ReviewNRW ANNUAL REPORT 2014 9
Chief Executive Officer Year in review continued...
NRW ANNUAL REPORT 2014CEO: Year in Review10
FY14 saw NRWs Civil Division secure its largest contract to date, the Roy Hill Rail Project.
The Divisions revenue of $842.3 million represented a slight decrease, the result of a
more competitive market. The award of the Roy Hill Rail Project (valued at $620 million) to
construct approximately 330 kilometres of main line heavy rail formation and associated
works was a major coup in the history of NRW. Following the successful award of the Rail
Project, NRW was subsequently awarded a Concrete Package and Bulk Earthworks Contract
at the Roy Hill Mine Site, valued at $200 million.
The Mining Divisions sales of $186.9 million were down on last year following the decision
made by the client at the Middlemount Coal Mine to transition to a dry hire model and the
loss of certain iron ore contracts as part of the industry majors cost improvement initiatives.
Whilst EBIT reduced to $13.1 million, reflecting the sales reduction, it was pleasing to see an
improvement in margins following cost restructuring initiatives implemented over the last 12
months and the positive contribution of some smaller projects completed during the year.
Action Drill & Blasts revenue of $110.0 million and EBIT of $7 million were below last year
due to lower civil work and consequently underutilisation of assets. The business secured
a number of new contracts in the year including the drill and blast scope for the Roy Hill
Rail Contract which improved utilisation in the second six months contributing to the
better second half performance. Of particular note, the Division was awarded a three year
Contract, valued at $60 million, for drill and blast operations at the Middlemount Coal Mine
Revenues in the Action Mining Services business reduced to $28 million compared to $41.8
million in the prior comparative period reflecting a downturn in market activity. The lower
revenues resulted in an operating loss of $0.8 million in the year compared to an operating
profit of $3.3 million in the corresponding period. A number of business improvement and
restructuring initiatives were implemented in the second half of the year. The business is
expected to recover to profit in FY15 however reviews of the ongoing business concluded