CLO 0.00% $1.46 clough limited

now-the bad news

  1. 1,035 Posts.
    Sydney - Wednesday - Nov 10: (RWE Australian Business News) -
    Clough Ltd today said the BassGas project had continued to be affected
    by a number of issues that would delay completion.
    Completion of the offshore works has been hampered by
    restrictions in access and in the provision of offshore accommodation by
    the client and progress at the onshore plant has been hit by the
    offshore delay, as well as by productivity issues and weather delays.
    As a consequence of the delays, Clough has incurred cost
    increases, which are the subject of additional claims that have been
    submitted to Origin.
    These claims so far are for about $25 million and further claims
    are under preparation.
    "We intend to pursue these claims vigorously, but in line with
    our accounting principles are not taking any of these claims to
    account," CEO and managing director Mr David Singleton said in a
    statement today.
    Cost increases of $20 million in addition to provisions booked
    last year have been recognised in the company's internal year-to-date
    forecasts, which will have an impact on half-year results.
    Mr Singleton said resolution of claims against the client in
    respect of these cost increases appeared to be unlikely in the short
    term given the approach adopted by the client in relation to claims so
    far on the project.
    Accordingly, no part of those claims has been included as
    "As a result, we are projecting a loss in the half-year of
    approximately $18 million with second-half trading as per our previous
    expectations leading to a near break-even position for the full year.
    "We will provide a further update early in the New Year as the
    project progresses through the next milestones," he said.
    Mr Singleton added that other than the BassGas project result,
    the underlying assumptions included in Clough's 2004/05 internal
    forecasts remained consistent with previous views and advice provided
    following the release of the 2003/04 results.
    Shares in Clough fell 4c to 53c today.

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