Solid results from Engenco’s rail businesses helped the engineer deliver a $3.4 million net profit from its continuing operations in the first half.
Engenco, which completed the sale of its Greentrains locomotive hire business in the six-month period, recorded a statutory net profit after tax of $2.9 million.
With Greentrains left out of the figures, Engenco was able to report the $3.4 million profit figure for its continuing operations in the first half.
That was up 27% year-on-year, despite revenue from continuing businesses dropping from $65.3 million to $62.4 million between the first half of FY16 and FY17.
Managing director Kevin Pallas said cost-cutting was key to the improved profitability.
The improvements left Engenco with $4.3 million in cash at the end of December 2016, compared with its $5.4 million net debt position at the end of June 2016.
“Engenco’s consolidated results for the first half reflect a further significant improvement in the group’s profitability,” Pallas said.
“Expenses were down overall as a result of the ongoing focus on cost-saving and efficiency programmes and earlier restructuring programmes beginning to take effect.”
The company’s Centre for Excellence in Rail Training business experienced lower margins in the first half, but still provided a “significant” contribution to Engenco’s overall performance, the company noted.
Investments made into the CERT Training business should set it up for further growth and improved performance, Engenco said.
Meanwhile, freight rail and mining infrastructure management business Total Momentum improved profit performance, mainly through reduced operational costs.
And another Engenco subsidiary, Gemco Rail, reported a “significantly better performance,” thanks to efficiency improvements.
Gemco Rail specialises in the remanufacture and repair of locomotives, wagons, bearings and other rail products.
“In Forrestfield, Western Australia, the wheel shop and bearing refurbishment shop performed very well as the flexible service offering continues to provide value to and attract major customers,” the company reported.
“Locomotive maintenance activity provided good revenue and profitability, particularly in the Dynon workshop in Victoria.”