Ausenco in record fall on FY profit warning

The engineering company plummeted after blaming poor market conditions for an earnings downgrade.

Ausenco (AAX) has suffered its worst fall on record this morning after downgrading its earnings guidance for the full year.

The engineering company's shares fell 31% to $2.49 in the first few minutes of trade following its announcement to the Australian Securities Exchange that net profit after tax is now expected to be $29 million and $41 million, down from its last guidance of between $37 million and $42 million announced in May.

Ausenco expects earnings before interest, tax, depreciation and amortisation (EBITDA) to be between $15 and $16 million for the first half of 2013 –  half of what analysts were estimating at around $29 million, according to Bloomberg.

Ausenco expects revenues for the first half to be $255 million and full-year revenues to be between $564 and $661 million.

Ausenco blamed further softening of the market conditions since May, when it had said the business environment was reverting back to normal.

"Since then we have seen a number of clients announce reduced capital expenditure programs, large asset write-downs and program to dispose of non-core or underperforming assets," Ausenco said.

However, the company expects greater earnings from the downturn in the Australian dollar into 2014 as it derives 70% of its revenues from overseas. It also anticipates growth for its global capital development assignments, with a trebling of new assignments to commence mid-2014.

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