NRW slumps on profit warning

Shares in NRW Holdings have tumbled after the mining contractor issued a full-year profit warning and hinted at a potential dispute with Samsung C&T over a $620 million rail contract at the Roy Hill iron ore project in the Pilbara.

NRW won the contract for earthworks for a rail line between Roy Hill and Port Hedland in September last year and has already completed 87 per cent of its contracted works.

However the company said it was in a series of negotiations with Samsung over a number of contract interpretations.

"Earnings for full-year 2015 are likely to be materially lower than full-year 2014 and will be significantly dependent on a successful outcome to a series of current and ongoing negotiations with Samsung on the Roy Hill rail project," the company warned.

"In particular, a number of contract interpretations remain outstanding between the parties, to the extent that the final outcome on the contract, and NRW's full-year 2015 earnings, cannot at this time be reliably determined."

The company said it would not make a further announcement until the "commercially sensitive" discussions with Samsung had concluded.

NRW managing director and chief executive Jules Pemberton said the company would work diligently to ensure it generated appropriate value from the work it had performed on the Roy Hill rail project.

"It is also worth confirming that the ($200 million) concrete project for the same client is currently progressing well," he said.

The company announced its full-year revenue was likely to come in at the lower end of previous guidance in a range of $1-$1.2 billion as it had, to date, secured only $800 million worth of work for the full-financial year.

NRW also flagged a $50 million impairment on its Action Equipment Services business because of challenging market conditions.

Shares in the company were off nine cents, or 15.52 per cent, to 49 cents at 7.35am.