GR Engineering Services Limited (ASX:GNG) (GR Engineering or Company) wishes to update the market in relation to recent operational and trading developments.
The Company advises that the notice of award issued by Saracen Mineral Holdings Limited (ASX:SAR) for the $16 million Carosue Dam Tertiary Crushing Project EPC Contract announced on 25 February 2013 has been indefinitely suspended by Saracen. This follows Saracen’s decision to suspend the project due to the recent fall in the gold price. It is estimated that the suspension of the project will result in a reduction to 2H13 revenue of approximately $4 million.
In response to this development and prevailing adverse market conditions, GR Engineering has made operational decisions to reposition itself for a market recovery. These decisions have included some employee redundancies and additional measures to reduce labour costs.
Commenting on the Company’s trading update, GR Engineering’s Managing Director, Mr Joe Ricciardo said:
"Whilst the continued challenging market environment has adversely impacted GR Engineering’s operations, we are confident of being able to take full advantage of an eventual market recovery. GR Engineering is in the fortunate position to be able to preserve its balance sheet and ultimately leverage off the quality of its people and reputation to achieve growth."
GR Engineering is maintaining its high standard of execution, with successful time and budget outcomes being achieved on current projects.