Work picking up for Fulton Hogan
One of New Zealand's largest privately owned businesses, Fulton Hogan says there has been a pick-up in the scale and pace of South Island projects helped by the Christchurch rebuild.
The roading and civil construction and engineering company says it recorded a strong result for the half year to December 31.
Managing director Nick Miller said that, year-to-date, the company had performed soundly in terms of both sales and profitability, backed with a strong forward order book.
"The strategies put in place last financial year continue to position the company well for the future. We are on track to meet our targets for project delivery, business results and shareholder returns," Miller said.
The unlisted company's previous year result had been severely impaired by write-downs taken on the weather-affected Pacific Highway, Sapphire to Woolgoolga Project. Outstanding contractual matters on the project were resolved in December 2012, Miller said.
A pick-up in the scale helped Fulton Hogan's New Zealand infrastructure business. The Stronger Christchurch Infrastructure Rebuild Team (SCIRT) was now at full momentum and achieving revenue targets, while work was underway on the upgrade of the Tekapo canal, he said.
SCIRT, which involves project partners including Fulton Hogan, is working on a $2 billion repair of Christchurch's horizontal infrastructure including roads and underground pipe systems.
Miller said while a large number of sealing, asphalting and road construction and maintenance contracts continued to be the backbone of the business in New Zealand, the maintenance business had spread its wings with work underway in Fiji on a joint venture contract.
The company's Australian industries business had significantly enhanced its year-to-date profit compared to the same period last year.
This was powered by a strong performance in regional Queensland and a back-to-basics approach to reinforce operation and pricing disciplines following an earlier period of rapid growth.
The Australian construction business was positioned to deliver on budget this year - following resolution of issues on the Pacific Highway project and a strong contribution from the civil works for the Australia Pacific LNG plant.
Work got underway this month on the A$288 million ($247 million) Majura Parkway project, Fulton Hogan's first major construction project in Australian Capital Territory. The business also continued to focus on containing several poorly performing projects that were reported on last financial year.
At a group level, Fulton Hogan was taking advantage of good demand for residential and rural land to divest non-core and non-operational assets.
This included the sale of its Otago forestry holding which was settled in December 2012, and strong sales at its Halswell and Lincoln residential developments in Christchurch which had helped reduce borrowings and interest costs.