Half-Yearlies: EVZ was the biggest climber after 12-month turnaround; says Fuel Security Package will help it
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Engineering firm EVZ (ASX:EVZ) rose the most of all the companies releasing their half yearly financial reports today.
Although its revenues fell from $34.4 million to $29.8 million, it turned its earnings and profit around from the prior corresponding period.
In the first half of FY20 it made a $2.84 million loss after tax but recorded a $2.27 million profit after tax.
Its earnings saw a sharp turnaround too, from $1.6 million in the red to $3.39 million in the black.
While COVID-19 lockdowns in Victoria reduced revenues, EVZ was able to defer capital expenditure in the liquid fuels sector.
A common thematic in the ASX industrial sector is the unprecedented levels of government stimulus which has led to several companies benefiting even if they weren’t direct recipients of government money.
The company said continuing stimulus wouldn’t be a bad thing even though COVID-19 continuing would be.
“While it is likely that the ongoing COVID-19 pandemic may lead to further government funded infrastructure expenditure, which should be favourable to the Group, the future financial performance of the Group will be dependant on how the pandemic continues to impact our clients and our people,” it said.
EVZ singled out the Morrison government’s Fuel Security Package as something it could benefit from – specifically its Brockman division which is an industrial product manufacturer and installer.
The Fuel Security Package was launched in the aftermath of COVID-19 with the intention to reduce reliance on imported liquid fuels and thereby prevent the possibility of supply shocks. It will result in onshore diesel storage increasing by 40 per cent over the next three years.
EVZ says the upcoming development of the Geelong Energy Hub would provide additional work for the company and Western Sydney Airport was one of many opportunities that awaited the sector in the future.
EVZ shares rose by as much as 23 per cent at market open this morning.