Tug boat operator Adsteam Marine has resumed dividend payments after a year on the sideline and said a strategic review of its business was on track.
Adsteam reported a net profit of $11.4 million for the half year to December 31, 2003, down from $12.0 million in the first half of 2001/02, and reiterated guidance of full year net profit post goodwill and restructuring costs of slightly above $22.5 million.
This time last year, Adsteam was reeling from a 26 per cent fall in first half net profit thanks to a weaker then expected contribution from the US business, flat earnings from the UK and lower non-towage earnings in Australia.
At that time the newly appointed managing director John Moller put future dividend payouts on hold and launched a review of Adsteam's global operations.
Mr Moller said that review was on track.
"Our operational improvements are now starting to deliver results and the underlying business remains strong despite competitive pressure in Australia, despite the decline in the UK currency and despite a pretty tough half in salvage," he said.
Adsteam declared a interim fully franked dividend of 2.1 cents, after promising, but not delivering, a seven cent dividend in the previous first half.
Mr Moller said the company expected to pay a final dividend in line with its policy of 50 per cent of net profit post goodwill and restructuring costs.
He said halting the dividend payment last financial year was fundamental to the group's aim of reducing net debt, which fell by 14 per cent in the first half to $358.7 million.
"That gives us the basis to be able to buy new tugs, to be able to move into new ports and to be able to grow this business in the future," Mr Moller said.
Adsteam's focus now was on cost cutting and improving the overall "fitness" of the company, he said.
One of the main initiatives was to create a more flexible workforce by aligning labour with customer demand, which had already found $4.6 million in annual savings at its major ports on Brisbane, Melbourne, Port Kembla and Sydney.
Adsteam was also well advanced in centralising its back office operations.
In the half year total revenue dropped to $152.9 million, compared with $166.1 million in the previous first half, with salvage revenue falling to $2.2 million from $6.1 million.
Mr Moller said harbour towage work had been steady in Australia and the UK over the past six months, giving the group a strong recurring revenue base to build on.