UPDATE 1pm: Shares in troubled Matrix Composites & Engineering fell sharply after the company downgraded its full-year profit outlook, citing soft demand for its products.
In a quarterly update, the deep sea products maker said it now expected to post a profit of between $6.6 million and $10.9 million on revenue of between $165 million and $175 million.
The estimates compare with analysts' consensus forecasts of a full-year profit of $21 million on revenue of $213 million.
Matrix said today it had been experiencing a delay in order confirmation for both buoyancy and well construction products.
“This has led to the decision to reduce short term output of buoyancy products until an appropriate backlog of orders is confirmed,” the company said.
“Consistent with other businesses which service the mineral processing sector, Matrix’s Offshore Services and Engineering division (MOSE) has experienced a softening in demand for its fabricated products used in this sector.
“As a result, the company expects lower than anticipated revenue from this division in FY2013.”
Matrix said it had responded by cutting labor and plant costs and reducing output.
It said it had reduced full-time equivalent employees in manufacturing and administrative support by 46 in October and would change its plant shift roster from three eight-hour shifts to two eight-hour shifts.
The company also said it had reduced manufacturing overheads by changes to operating processes and raw material management.
Matrix said it had recorded positive earnings and operating cash flow in the first quarter despite lower than anticipated revenue from well construction products, adverse movements in the exchange rate and higher than budgeted labour costs.
The company said it had a backlog on its order book of $US73 million and a work pipeline exceeding $US1 billion.
Matrix shares were off 30 cents, or 15.15 per cent, to $1.68 shortly before the market close after hitting an intraday low of $1.66.