Fulton Hogan expects the Christchurch rebuild to provide
extra revenue in the current financial year. Photo
Infrastructure. company Fulton Hogan had returned to a
''steady state'', on Tuesday reporting profits for the June 30
year well ahead of the previous corresponding period, managing
director Nick Miller said yesterday.
Mr Miller was particularly pleased with the strong return to
form in the privately owned company's 80th year of trading.
Fulton Hogan employs about 5300 people.
The Christchurch-based company reported earnings before
interest, tax, depreciation and amortisation (ebitda) of
$258.5 million for the June year, compared with $134.9
million in 2012 and $246 million in 2011.
The reported profit of $96.5 million for the period was well
ahead of the $7.9 million in the previous period, but
included some non-cash items relating to equity-accounted
The group also recorded its highest revenue of $3.22 billion
in the period, up from $2.7 billion in the previous period.
The strong performance enabled Fulton Hogan to repay about
$70 million of bank debt and complete another tranche of
buying back shares from Shell. At balance date, the Shell
shareholding stood at just above 10%, down from the original
37.4% when the buy-back started in December 2010.
Mr Miller said the greatly improved result followed decisive
action by the company to address several issues which had
dragged down the previous year's result.
''During the year, a lot of effort has gone into resolving
operational and contractual challenges associated with
several major Australian projects which had been hampered by
some of the most severe weather recorded in decades.
''Our teams have made excellent progress in containing and
retiring a number of these projects in a collaborative way.''
Among the projects to be resolved was the Pacific Highway, he
said. Mr Miller described Fulton Hogan as being in a ''steady
state'' although it still was allowing about $52.4 million or
provision in the accounts for equity-accounted joint
Profit growth had come from across the business,
demonstrating the group's strength across its portfolios.
That included the Australian construction and industries
businesses, as well as New Zealand infrastructure and
regional businesses, with strong results from the
metropolitan markets of Auckland and Christchurch.
Overall, about 60% of the group's revenue came from
Australia, something Mr Miller expected to increase.
One of Fulton Hogan's strengths was its virtual integration,
meaning it could provide services across a wide range of
activities such as surfacing, quarrying and asset management.
''This is a unique model in Australia and gives us an
opportunity and a point of difference.''
In Australia, the engineering infrastructure industry was
worth about $94 billion, of which $15 billion was pure
roading. That gave Fulton Hogan plenty of scope for growth,
Looking ahead, Mr Miller said the group started the year with
80% of its revenue locked in, something he was comfortable
with. Forward orders totalled $3.4 billion.
The group was jointly bidding for the Transmission Gully
public private partnership and pursuing outsourced road
maintenance contracts in Australia.
''As a cornerstone member of Stronger Christchurch
Infrastructure Rebuild Team, we continue to be in the front
line rebuilding Christchurch, with the team now operating at
Other projects being pursued were the stewardship maintenance
contract in western Sydney, the Princes Highway upgrade and
Berry Bypass in New South Wales, and southeast Queensland
road maintenance contracts.