SERVICES Transfield: It's tough
Transfield Services has warned of continued tough trading conditions as it works to cut debt amid ongoing weak revenue generation.
As a result, the group gave no indication on Friday when dividend payments would be resumed to its dwindling investor base, with shareholder numbers having halved over the past five years as its share price and earnings have slumped.
"The focus is the preservation of capital," outgoing chairman Tony Shepherd told shareholders at the annual meeting. "Capital preservation and to be ready for when the economy turns."
Mr Shepherd was appointed this week to head the government's Commission of Audit into the nation's finances.
"Business conditions are some of the most challenging we have experienced," he said.
As a result, there is a freeze on dividends and salaries while capital spending is being limited.
Earlier this week, Transfield sold its share of a venture in New Zealand with WorleyParsons for $30 million, as well as selling its share of a venture in Qatar.
The company said it left unchanged its year-to-June net profit forecast at $65 million to $70 million, which is predicated on no further deterioration in revenue.