AusGroup says the group is expected to report a loss for the fourth quarter ended 30 June 2010 due to an impairment charge recorded for a subsidiary, Cactus Engineering & Trading.
Since the previous review, AusGroup says Cactus has experienced further declines in revenue and margins and business has remained challenging due to slow demand for the Singapore-based fabrication and machining services from the upstream oil and gas sector. Therefore, the directors are of the view that it is appropriate to make certain impairment adjustment on the goodwill associated with the acquisition of Cactus.
This impairment loss will be reflected as an expense in the income statement, thereby contributing to a loss for the fourth quarter ended 30 June 2010. The impairment loss is a non-cash flow item and is not expected to have any adverse impact on the operations of the group.
But the group is expected to be profitable for the full year ended 30 June 2010.
Further details on the full-year results of the group will be disclosed when the group releases its unaudited consolidated financial results for FY 2010 before the end of August 2010.