The NRW Holdings Limited (ASX: NWH) share price is plunging today, down 16% at $2.35 in afternoon trading.
Let’s take a look at the mining and construction services provider’s results for the first half of the 2021 financial year ending 31 December.
What financial results did NRW Holdings report?
In this morning’s release, NRW reported a range of strong results. However, today’s sharp share price fall is possibly due to a sizable drop in profits in the half-year.
The positive results include record first-half revenue of $1.168 billion. That’s an increase of 44% from the previous corresponding period.
Earnings before interest, tax, depreciation and amortisation (EBITDA) also increased, up by 28% to $132.8 million compared to H1 FY20.
Profits, however, were down. The company reported NPATN (which incorporates earnings before amortisation of acquisition intangibles and non-recurring transactions costs at normal 30% tax rate) of $40.3 million. That’s down 12% from the $47.6 million reported in the prior corresponding period.
NRW reported a cash balance of $171.4 million and said it had reduced its net debt by $43.2 million to $96.5 million.
The company also confirmed it was moving to compulsory acquisition to take over Primero Group Ltd (ASX: PGX).
Management comments
Looking ahead, NRW CEO Jules Pemberton said:
Growth is expected to continue as a result of increasing expenditure on infrastructure projects at state and federal level, demand for commodities remaining strong and as a consequence of the recently announced Primero acquisition…
The addition of Primero to the MET business represents a further diversification of our strategic platform to offer clients continuity of services across the whole lifecycle of resource projects – from early planning, design, development, construction to operations and maintenance.
Our exposure and now strengthened capability to participate in the future energy minerals and renewables sectors is also set to grow through Primero’s existing client base…
NRW will pay an interim dividend of 4 cents per share, up 60% from the first half of the 2020 financial year.
NRW share price snapshot
After being savaged during the wider COVID-19 market selloff last year, NRW shares are up 114% from their 19 March 2020 lows. Even with that gain, shares are still down 19% over the past 12 months. By comparison, the All Ordinaries Index (ASX: XAO) is down 1% over that same period.
Year-to-date, the NRW share price is down 21%.
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Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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