The company saw its revenue rise 5.8% to $188.8 million while its net profit was stuck at $3.5 million for the six months to December 2012.
Mining remained profitable despite the severe decline in the coal sector, which drove revenue down 30.2% to $68.9 million and profit before tax of $2.1 million – a 72.4% drop on the previous corresponding period.
WDS managing director Terry Chapman said: “The past 12 months have demonstrated the value of our diversified business model.
“Over this period the energy division has reaped the benefits of the CSG/LNG industry bringing a series of contracts to market while the mining division has suffered from the marked deterioration in the Australian coal industry.”
The mining slowdown has also impacted overall employee numbers, down 16% from FY12.
EBITDA margins contracted from 11.4% in the previous corresponding period to 9%. The mining division’s order book at the end of December stood at $40 million compared with $110 million in June.
The slowdown in mining has been more severe and is likely to extend longer than previously anticipated, the company said.
Revenue for the full year from the mining division is now forecast to decline by more than 40% on the previous corresponding period.
Despite these challenging conditions, WDS was awarded a $12 million, one-year contract for the provision of underground mine services at BHP Billiton’s Dendrobium Mine in New South Wales and maintains a presence with the majority of its pre-existing clients, Chapman said.
“It is expected that there will be reduced contract activity for the next six to 12 months,” he said.
“WDS has retained its delivery capability and intends to capitalise on the opportunities that will emerge for growth when the cycle moves out of the current downturn. We have submitted tenders for over $290 million of work which are currently under evaluation.”
The slump in mining is expected to continue for the short term.
But the medium-term growth profile for the coal industry is positive, with production forecasts for the five years to 2018 predicted to increase 39% – from 400 million tonnes to 554Mt – WDS said.
“Given the continued deterioration in mining, net profit after tax for the full year is more likely to be in the range of $6-8 million compared to $8.6 million profit in FY12,” the company said.
