Hazardous waste and disposal company, Augean (AIM:AUG) saw its share price drop on Monday morning, following the publication of its results for a difficult half year of trading.
The company stated that while all of its sites remained fully operational during the first half, Covid negatively impacted all its segments, with the exception of its EfW ash segment. The worst-hit were its radioactive, biomass EfW and construction sectors, all of which were placed on hold due to lockdown restrictions.
The company added that:
“The North Sea service business has been heavily impacted both by the Covid-19 effect on activity levels as well as an unprecedented significant decline in the oil price as a result of Covid-19. The first quarter generated more than two thirds of the half year profits with the second quarter heavily impacted by Covid-19.”
This difficult trading was reflected in its results, with adjusted revenues down 6% year-on-year, to £41.4 million.
This led an 11% dip in adjusted profits, down from £9.6 million to £8.5 million, and a fall in adjusted EBITDA of 6%, from £14.2 million to £13.3 million.
The situation was equally bleak for the company’s shareholders, with the company once again deciding not to declare a dividend, and adjusted basic earnings falling by 12%, to 6.70p.
Augean response
Commenting on the company’s performance, Executive Chairman, Jim Meredith, commented:
“The Group has delivered a robust performance across all areas of the business despite significant headwinds in quarter two. We are working hard to recoup the impact of the lower oil price and Covid-19 over the second half and, assuming no further Covid-19 lockdowns, we anticipate that full year results will be broadly in line with market expectations.”
“The Group’s performance in difficult circumstances (Covid-19 and oil price reduction) demonstrated the resilience of our current portfolio of activities and so maintaining our growth profile”.
Investor notes
Following the update, Augean shares fell 15.26% or 29.00p, to 161.00p apiece 21/09/20 12:30 GMT. Hargreaves Lansdown currently quotes the company’s p.e ratio at being 12.39, while Marketbeat’s community currently votes 64.55% in favour of Augean being given an ‘underperform’ sentiment.
