Watpac slashes costs after downgrade

Chief executive says the cost-cutting is part of renewed focus on mining services.

Construction group Watpac Ltd has slashed $30 million in costs from its balance sheet following an earnings downgrade in May but chief executive officer Martin Munro remains upbeat about opportunities in the mining services sector, The Australian reports.

Mr Munro told the newspaper the cost-cutting was part of a renewed focus on mining services, which delivers the company $500 million per year in revenue, as well as on defence and social infrastructure and commercial construction (see Roger Montgomery's Inside the mining services disaster).

"The reports of the mining sector stopping is just not correct," Mr Munro said. But he conceded the sector slowdown had impacted business over the last four years and had "really started to bite in the last 18 months".

He said there was still a flow of ongoing projects and that the $30 million reduction in operating overheads was a significant proportion of Watpac's $1.5 billion annual turnover, The Australian reports.