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| Subject: ERG loses $198.3m in bad season for WA firms September 13, 2003 | |
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Author: WA REPORTING laggards led by ERG have completed a disappointing year by reporting combined losses running into hundreds of millions of dollars. |
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Date Posted: Friday, September 12, 06:10:12pm In reply to: The State Government is proposing radical changes to transport services. Joseph Kerr looks at which reforms might make it. 's message, "Big-ticket changesSeptember 13, 2003" on Friday, September 12, 06:07:31pm http://www.thewest.com.au/20030913/business/tw-business-home-sto112485.html ERG loses $198.3m in bad season for WA firms By Sue Peacock WA REPORTING laggards led by ERG have completed a disappointing year by reporting combined losses running into hundreds of millions of dollars. The fare collection group ERG joined a flood of companies posting results on the last day of the reporting season, announcing a net loss of $198.3 million. However, the company was joined in the red by a raft of other Perth-based companies, including Brandrill ($31 million), St Barbara Mines ($32.7 million), Amcom Telecommunications ($12.4 million), AdultShop.com ($9.5 million), Anaconda Nickel ($6.2 million) and Xanadu Wines ($6.2 million). Despite its loss, ERG renewed assurances to long-suffering shareholders that its loss-making days are nearly at an end. The Balcatta-based company said despite haemorraghing more than $400 million in the past two years, including $243.4 million last year, it expected to return to the black in 2003-04. Nursing a broken hip courtesy of a recent farming accident, ERG chief executive Peter Fogarty said from his bedside that the signs were good for a turnaround at the embattled smart card company after an improved second-half result. The company's return to profits in the second half of this year would depend on the success of major projects in Seattle, Stockholm, Sydney and Washington DC. On completion of these projects, ERG will have a portfolio of eight long-term operate and maintenance contracts with contract terms ranging from five to 15 years. Mr Fogarty said previous project delays, which had resulted in a 20 to 30 per cent drop in revenue in real terms in 2003-03, involved a big degree of development, which made the projects higher risk. These delays saw operating revenue down 24 per cent to $205.6 million in 2002-03 compared with the previous year. This reduction in revenue levels was expected to be corrected by major projects in Gothenburg, Seattle, Stockholm, Sydney and Washington DC. Changes including the $250 million note conversion, Proton World sale and recent Rome contract restructure would give the company the working capital needed to deliver its big order book and take on additional business. This year's loss included $114 million in one offs, including first half significant items totalling $65.9 million, most of which related to a hit taken on the Proton World sale. ERG sold Proton World to a Swiss company earlier this year but can still earn about $38 million in fees under the sale contract. Total revenue for 2002-03 was $228.03 million compared with $301.55 million previously. ERG shares closed 1¢ higher at 92¢. Amcom's maiden net operating profit of $356,332 for the year was wiped out by the write-off of its entire $12.7 million investment in wholesale carrier IP1 Australia. IP1, which began life as a wholly owned subsidiary of Amcom, built a $160 million transcontinental broadband cable network and launched it in December last year. Just six months later, the company was placed into the hands of receivers owing an estimated $80 million. A multi-million-dollar hit also took its toll on WA pornbroker AdultShop.com, which wrote off $7.4 million in goodwill relating to its acquisition of online entertainment division Today's Success. The result before write-downs was also hit by a 28.3 per cent slump in profit to $84.1 million for the year to June 30. Amcom shares yesterday shed 0.5¢ to 15.5¢, while AdultShop shares dipped 0.1¢ to 6.6¢. [ Next Thread | Previous Thread | Next Message | Previous Message ] |
| Subject | Author | Date |
| SMARTCARD maker ERG has posted another resounding loss - dropping $198.3 million in the past financial year. | Cards will turn, says ERGBy David King13sep03 | Friday, September 12, 06:13:35pm |