Perth, western Australia-based Orbital Engine Corporation has announced an after-tax loss of $A26.8 million for the year ended 30 June, which includes a $6.4 million provision for investment in Indonesian licensee Texmaco, compared to a $26.8 million loss in the year ended 30 June 2001.
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The operating loss after taxation was $20.4 million compared to $26.8 million the previous year.
The operating loss in the second half of $6.0 million compared to $14.4 million in the first half.
Orbital booked restructuring costs including redundancy expenses of $5.4 million during the year, $3.5 million of these costs were incurred in the second half.
Chief executive officer Peter Cook, appointed on 1 January 2002, said that the results were clearly disappointing although showed improvement in the second half, and reflected the performance of a company in transition, operating in tough markets.
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By GlobalData“These results reflect the downturn in several sectors in which we operate, as lack of confidence, particularly in the USA, has affected discretionary consumer expenditure and OEMs’ responses to those conditions.”
Total revenue declined by 13.7% to $51.2 million and the three main revenue streams were all affected by depressed market conditions, despite continued introduction of new products.
In May and June 2002, Piaggio and Peugeot Motocycles each launched Orbital’s direct injection technology on two models of their scooters.
Orbital’s Combustion Process (OCP) is now used on 24 different products in the market from six manufacturers, compared to 15 products from five manufacturers at 30 June 2001.
“During my first six months, we have reviewed key operational and strategic issues and implemented changes to the organisation’s structure and size. Changes have occurred at board and employee levels and we should see the results of these initiatives in the next financial year,” said Cook.
Overhead expenses were down by 18% to $25.4 million, due primarily to cost cutting initiatives introduced in May 2001 and January 2002.
A recent business review will promote a further $4.0 million of cost reductions per year and the cost of implementing these changes include redundancy costs, provision for surplus lease space, and consequential write-off of fixed assets, has been accounted for in full in the latest results.
