Laboratory testing outfit ALS has signalled it will take at least another three months for its energy unit to return to break even, after group-wide losses for the past two years have topped $400 million.
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In response, the shares were dumped, closing down 7 per cent at $4.17, after hitting a low of $3.86.
The continued pressure on earnings follows the raising of $325 million from shareholders late last year to repay bank debt as well as to fund acquisitions in the life sciences sector to position the group for stronger growth. The shares were issued at $3.35 each.
The net loss in the year to March rose to $239.7 million from the $172.7 million lost a year earlier, on revenue which declined to $1.36 billion from $1.42 billion. The main factor in the latest loss was the $314 million write-down of asset values in the wake of the downturn in the resources sector.
Putting to one side the write-offs, restructuring and other one-off charges, the underlying profit for the year stood at $99.5 million which was down from $135.4 million earned a year earlier. This left the underlying earnings a share at 21.7¢ down from 31.9¢ a year earlier.
An improved performance from the life sciences and minerals testing units failed to offset the continued pressures on its energy, geochemistry and metallurgy units, it said. The life sciences unit was the only division to record a rise in revenue, with the company signalling the unit will enjoy "high single digit percentage" growth over the next few years as it continues to review "bolt-on" acquisitions in Europe and north America.
The chief executive Greg Kilmister said the group has around $180 million in cash "available for the right acquisitions" as it continues to review opportunities to acquire businesses in Europe in the food area. It has been outbid on three recent deals, with two other deals on the table at the moment.
"We're thinking about how we can be creative about valuations," Mr Kilmister said. "Anything that comes to market is well bid."
However with the key energy division, the objective is to get it to break even by September, with market conditions to remain "challenging and unpredictable" until the price of oil stabilises, it said.
Some countries such as Canada, Angola and Colombia have been exited, Mr Kilmister said, as it looks to divest some units in this sector.
"We remain concerned because we can't get revenues to the levels we need to maintain the business," he said of its oil and gas operations.
Against the backdrop of an uncertain economic environment and volatile commodity prices, ALS said it continues to pursue a strategy of expanding its non-cyclical units to help offset this while also reorganising its other units.
A final dividend of 6¢ a share is to be paid on the expanded capital base, brings the total payout to 13.5¢ a share down from 21¢ paid previously.
