CONSTRUCTION and mining services company Watpac Limited (ASX: WTP) have posted an after tax profit of $1.3 million for the first half year, lower than $4.9 million in the previous corresponding period.
The profit result was affected by $4.4 million in asset impairments associated with four property holdings, two of which are contracted for sale below carrying value.
The underlying net profit before tax was $10.2 million, reflecting a 57% improvement on the pcp. As a result of the group’s retained earnings position, no interim dividend has been declared.
Watpac chair Chris Freeman said despite the difficult market conditions, the strategy to divest a number of property assets progressed well during the first half of FY13, achieving $72 million in sales.
“Although property asset impairments have had a shortâ€term impact on our profits, our underlying performance demonstrates the health and strength of our business.
“This is reinforced by our national work in hand position at 31 December 2012 totalling $1.4 billion across our core construction operations in Queensland, New South Wales, Victoria and South Australia, our national contract mining business, and our civil operations in Western Australia,” he added.
Watpac also announced that work has commenced on the new $65 million Ibis Adelaide Hotel, creating more than 200 construction jobs and delivering the city’s first purposeâ€built economy hotel in more than two decades.
Watpac Construction has been appointed to build the hotel. The hotel, located on Grenfell St, is being developed by Hines Property and will be managed by global hotel group Accor.
Watpac CEO Martin Monro said to win a project of this calibre in such a competitive market is a strong endorsement of Watpac’s skills and experience
The 17â€storey premium economy Ibis Adelaide Hotel will feature 311 hotel rooms, conference and meeting facilities, a guest lounge, food and beverage retail and a fitness centre.
Hines Property managing director James Hines said the Adelaide hotel market has a predominance of older style properties operated at the four and five star level and there is an evident gap in the market for both new hotels and those which are operated at the premium economy level.
Accor Pacific chief operating officer Simon McGrath said Ibis Adelaide will appeal to both the corporate and leisure travel markets and is slated to welcome its first guests in 2014.
The Ibis Adelaide will to create up to 80 permanent jobs when it becomes fully operational.
Property Review
