Well projects in Jordan blamed for annual loss
Bauer AG, producer of trenching equipment and with a major civil engineering business unit, has said it expects a net loss for 2013, due to “complex conditions” surrounding the company’s Group’s Resources segment in Jordan, where it has been involved in an extensive well construction project.
With the completion of the well construction project, the earnings forecast for the project has had to be adjusted downwards by some $27.4 million.
Bauer has previously reported “wide-ranging problems” in Jordan, saying in its recent report that construction costs have substiantially increased, and that “the financial difficulties being experienced by Jordan have meant that no amicable settlement has yet been obtained”.
Bauer acquired a 60% stake in SITE Group in 2009. The company operates high-capacity deep drilling rigs for the oil-and gas industry, for well drilling and for the exploration of mineral deposits, and has been successful in countries outside of Jordan, including Yemen and Pakistant.
According to Bauer, its equipment segment continues to suffer from weaker margins than last year. The Group’s third-quarter figures have been further impacted by reduced profit contributions from the Construction segment resulting from delays on major projects at the start of the year.
Bauer is now involved in an expenditure restructuring as part of a cost-cutting programme.