The loss was primarily due to a $20 million write-down of goodwill associated with its metal engineering arm Intermet and providing for $3.7 million of doubtful debt.

“The current subdued trading conditions in the metals sector are expected to persist for a minimum of 12-18 months so Sedgman has reduced the headcount within Intermet and implemented cost-cutting initiatives,” managing director Mark Read said.

Today’s loss compared with a profit of $11.3 million in the previous corresponding period.

Earnings before interest, tax and amortisation (EBITA) was $21 million, in line with the 2008 first half result.

Revenue was down 15.6% to $178.1 million, which Sedgman blamed on the run-off of the Dawson and Lake Lindsay coal projects.

Read said today’s result was underpinned by longer-term operating contracts in coal and metals, and was “particularly pleasing” given the tough economic times.

Sedgman’s order book stood at $600 million at the half year and was continuing to be replenished from the $4.3 billion pipeline of project opportunities.

“So the outlook remains positive and our workload remains strong in coal where we have seen some project slippage but no cancellations,” Read said.

He said Sedgman’s core business would remain in the delivery of resource sector staples of coking and thermal coal, both in Australia and abroad.

In addition to the recently won Bengalla and New Acland contracts worth almost $40 million, Read said Sedgman was well positioned to secure several other coal contracts on major projects.

He said the company had recently received a letter of intent to proceed with the $55 million design and construction of a coal handling plant upgrade in Chile.

Sedgman was trading steady at 40c mid-morning today.