Matrix cuts workforce

Perth-based Matrix Composites & Engineering has flagged a number of redundancies and a $2.6 million impairment as it battles falling demand for its services in the tough economic climate.

The manufacturer and supplier of engineering products and services said the fall in global energy prices resulted in a number of delays to projects it had been contracted for, leading to staff cuts and reduced output at its Henderson and Malaga operations.

Matrix said it would incur a $2.6 million hit as a result of the redundancies and downsizing of its Malaga operations, while the recent downturn in the oil price has lowered its scheduled production output.

Chief executive Aaron Begley said the production and cost reduction plans would allow the business to adapt to the current market challenges, maintain competitiveness and long-term viability, while maintaining the capacity to increase output for short-term needs.

“With a strong balance sheet and minimal debt, the company is well positioned to manage the short-term softening in demand which will see us emerge stronger once the downturn ends,” he said.

“Despite recent market uncertainty caused by the falling oil price, Matrix’s outlook remains strong over the medium-to-long-term.”

Mr Begley said it was likely that the reduction would be short lived and expected the company to return to increased production as conditions improved.

Meanwhile, Matrix also announced it had been awarded several new contracts for the supply of drilling riser buoyancy to new China and US-based clients.

The projects are scheduled for completion and delivery in the 2016 financial year.

The company said about half of its contracted orders, which total $US97 million, are scheduled for production by the end of the second quarter of FY16.

Matrix expects to generate revenue between $110 million to $130 million in FY16.

Matrix shares were unchanged at 55 cents each at 1:50pm.