Transpacific Industries Group Ltd (ASX: TPI) shares are down about 13% in morning trade after the company reported a half-year net loss of $41.7 million. The result is down from the reported $167.1 million net profit in the first half a year ago.
According to the waste management company's media release, the reported net loss mainly resulted from adjustments related to "impairments of its hydrocarbons business, costs associated with the fleet grounding which occurred in August 2014 and an additional gain on the sale of the New Zealand business."
Before adjustments, Transpacific Industries had an underlying net profit after tax (NPAT) to ordinary equity holders of $22.8 million, down 45% from $41.7 million in the previous corresponding period.
The market reacted strongly, sending shares down to $0.77. The stock has been trailing down from highs of around $1.15 over the past twelve months.
Here are the half-year results highlights:
Revenue reported revenue $689.5 million, down 31.2% from $1.003 billion
Earnings before interest, tax, depreciation and amortisation (EBITDA) underlying EBITDA $121.8 million, down 12.7% (after excluding discontinued operations)
Net profit after tax (NPAT) reported NPAT was a net loss of $41.7 million / underlying NPAT $22.8 million
Earnings per share reported EPS -2.6 cents per share, down from 10 cps in the first half a year ago
Dividend per share an interim dividend of 0.7 cents per share was declared
The big reduction in underlying earnings also reflects the sale of the company's New Zealand and commercial vehicles businesses. In addition, the company's waste oil collection business saw a decrease in revenue from lower selling prices due to the sudden fall in world crude oil prices. Waste oil collection volumes were also impacted by the decline in mining and industrial activity.
As the company is rescaling the business to a more manageable and profitable level, the stock may remain at low price levels. CEO Robert Boucher said in the media release, "Based upon our current forecasts, we do not expect any improvement in market conditions for the remainder of this financial year, particularly in the resources and industrial segments."
Transpacific Industries did announce one acquisition in the first half of the Melbourne Regional landfill. The company said it will secure its long-term position in the important Melbourne waste management market.
