Fleetwood returns down on reduced demand from mining firms
CARAVAN maker and temporary accommodation provider Fleetwood Corp expects an improved second half, after a sharp fall in first-half profit as miners curtailed projects amid falling commodity prices.
Net profit for the first half to December 31 fell 81 per cent to $5.12 million.
Fleetwood's Searipple Village in the Pilbara town of Karratha in Western Australia reported a 50 per cent fall in capacity following Woodside Petroleum's delay in the expansion of the Pluto liquefied natural gas (LNG) project last year.
Rio Tinto also scaled back a major iron ore project in WA.
The chief executive, Stephen Price, said Fleetwood was not tying its fortunes to the resources sector.
"We always keep our eye on commodity prices and the outlook," he said. "We are very mindful of commodity prices and what the impact is on our villages, but we're not wedded to any particular sector."
The company did not provide full year earnings guidance but said the outlook would improve this year as the Osprey and Searipple upgrade projects in WA and the Gladstone project in Queensland underpinned manufacturing activity.
Mr Price said the Gladstone precinct to house Curtis Island LNG plant workers would take business away from competitors because it offered shorter travel times.
Patersons analyst Graeme Carson said the first phase of the 350-room Gladstone precinct was being built without contracts being signed for tenants, which he described as risky.
He said the cancellation of major Pilbara resources projects meant Fleetwood had to renegotiate accommodation contracts.
"The demand for mining accommodation has fallen off because capital expenditure is not there," he said.
Flagging consumer sentiment was expected to affect revenue for the recreational vehicles division, which comprises about a third of the company's business.
Fleetwood declared an interim dividend of 30¢ a share, down from 33¢ a year earlier.
Its shares finished on Tuesday 37¢ lower at $9.60.