Record profit for Fulton Hogan

Tuesday 29th September 2009

Fulton Hogan, the closely held roading and construction company that counts Shell New Zealand as a cornerstone shareholder, posted a record profit after reining in costs and paying less tax.

Net operating profit rose to $100.4 million in the 12 months ended June 30, from $98.9 million a year earlier, the Christchurch-based company said in its annual review. Operating revenue rose 11% to $1.85 billion.

“While there are some positive signs that the global financial crisis is abating the full recovery may be still some time away,” managing director David Faulkner said. “Our committed forward work is over $2.3 billion,” he said.

“With some good opportunities for tenders to bid in the near future we can be cautiously optimistic for the year ahead.

Fulton Hogan said a “strong focus has been brought to bear” on its cost structure, with 371 jobs eliminated, reducing its workforce to 3,675. As a result net income per employee rose by 15%.

The construction company typically teams up with one of a loose grouping of development, engineering and roading firms on major contracts, which have included the Puhoi-to-Wellsford toll road.

Competition for key highway projects as part of the government’s accelerated infrastructure spend, which includes the seven roads of national significance, will be “fierce,” the company said.

Its forward order book is relatively strong with just over half of its 2009/10 revenue already secured at the start of the year, it said.

The outlook for Fulton Hogan in Australia is more robust, with increases on the 2008 A$12 billion road construction figure expected from both government infrastructure and privately funded works.

Overall the company sees further significant investment via its Australian acquisitions, “with growing recognition and acceptance of Fulton Hogan within the Australian contracting market.”

The company said its three new asphalt plants in Australia have been built to utilize recycled asphalt pavement. These plants produce warm asphalts that use 30% less energy in the production process, produce 30% less carbon dioxide emissions and have 50-60% less dust emissions than older manufacturing plants.

Fulton Hogan’s carbon footprint increased by approximately 4% over the year to 114,000 tonnes of carbon dioxide, less than its 11% increase in revenue.

CO2 emissions were partly offset by Fulton Hogan’s 2800 hectares of forests which it estimates sequester approximately 70,000 tonnes per annum.

Businesswire.co.nz

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