Nomad Building Solutions says losses associated with the completion of its Gorgon contract were the main contributing factors to its $18.7 million first half loss.
For the half year to December 31, Nomad recorded an $18.7 million loss on $101 million revenue.
For the prior corresponding half-year, the company's loss after tax was $5.2 million on $93 million revenue.
The results included an underlying operating loss of $3.3 million, a $10 million goodwill impairment charge against its Rapley Wilkinson business, and $8.2 million in losses and provisioning, primarily for its Gorgon contract with the Thiess Decmil Kentz joint venture.
"The majority of the issues with this contract relate to significant and late design changes requested by TDKJV, the subsequent impact on procurement of key items and the impost on contract administration of the variation claims arising from the design changes," Nomad said in a statement.
As a result of the losses, Nomad had breached its earnings and interest covenants within its banking facilities.
The company said it was currently in discussions with its bank regarding refinancing proposals.
"The bank is aware of the likely timeframe needed to complete the company's turnaround and deliver improved financial performance," Nomad said.
Despite the poor financial performance, Nomad said the strength of the resources sector and associated expected growth would result in a turnaround reflected in its 2011/2012 financial year results.
"Having successfully completed the Gorgon buildings, Nomad Modular is positioned as a manufacturer of more complex central facilities as well as traditional accommodation for projects in remote areas in both Western Australia and Queensland," the company said.
"Recent management changes have strengthened the design, manufacturing and project management capabilities of this business."
Nomad will not pay a dividend for the period. It's stock was unchanged at close of trade today, at $0.14.
By Dan Wilkie
