Industrial supplier within construction-related sectors, Austro Group on Monday announced diluted headline earnings per share of 5.2 cents for the year ended August 2010, from 10 cents previously.

Earnings per share declined to 5.4 cents, from 10.1 cents earlier.

Revenue dropped to R401.9 million, from R580.5 million, with profit from operations at R36.64 million, from R88.04 million in 2009.

Austro declared a dividend per share of 4 cents from 2 cents previously.

"The group delivered moderate results considering the effect of the depressed economy on the Power Division and the lower than expected demand for woodworking equipment in anticipation of the 2010 World Cup.

"The highlight was the elimination of all significant debt on the balance sheet and cash generated by operating activities of R120.9 million," it said.

Revenue for its power division decreased by 36.5% to R268.4 million, while it contributed 66.8% overall revenue, from 72.8% in 2009.

"New Way, the supplier and manufacturer of generator sets, industrial diesel engines and related components, experienced a slow start, but has a reasonable order book going forward,"

it said.

For its wood division, Austro Group pointed to the benefits of a restructuring process, "and resultant cost reductions made in the previous year are now being felt with the operating profit being in line with forecasts.

This division contributed 33.2% to group revenue, which declined by 15.5% to R133.5 million.

Looking ahead, Austro said it had completed its consolidation process, "and is attempting to maximise the synergies to be gained from the various divisions.

The group has been restructured with all Power interests being housed in one entity, New Way Power and the Wood interests in Austro Wood.

"In addition in the power division the consolidation of its Gauteng operations into one facility in Alberton, which will result in efficiencies in warehousing, manufacturing and logistics, is progressing well".

Neptune's Gauteng operation which started operating in late 2008 has increased market share and beginning to produce profits, it said.

"The restructuring of the Gauteng and KZN operations has placed the Wood Division in a good position to benefit from an upturn in the economy, due to its lower cost and asset base.

"It is anticipated that market growth will remain relatively flat in the forthcoming year.

The Wood Division has identified a range of new products, which it will introduce during the course of the year. Cost containment will remain a major focus in the current year," Austro Group concluded.

Source: I-Net Bridge