LONDON (SHARECAST) – Cost escalation and over-runs in Mongolia saw profits slashed at speciality metal producer and recycler Metal-Tech.
As presaged in its profits warning at the beginning of September, an increase in revenues did not translate into a healthier bottom line.
Revenues grew 31% to $85.2m in the first half of 2008 from $65.1m a year earlier, but profit after tax slumped to $3.8m from $8.3m.
Profit before tax tumbled to $5m from $9m in the first half of 2007.
The company’s Mongolian plant has had a difficult year, with operational difficulties resulting in lower than expected production and also quality issues.
At the same time the plant experienced “significant cost inflation”.
The company said some progress has been made in resolving operational difficulties at the Mongolian plant and it expects “operational leverage” and quality to improve in the fourth quarter.
SOURCE: sharecast.com
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