Pure Technologies Ltd. says fourth-quarter profits plummeted, largely due to a halt of operations in Libya, a country rebuilding after a bloody civil war.
The Calgary-based company, which provides technology for monitoring pipelines and other infrastructure, said Thursday that its profits sank to $1.4 million, or three cents per share, from $2.5 million, or seven cents per share in the three months ended Dec. 31.
Revenue fell 12 per cent to $14.6 million from $16.5 million in the same quarter of 2010.
The company's water project in Libya, the Man-Made River Authority, was suspended after a civil war broke out in the country earlier this year and NATO air strikes were launched against the Libyan military.
Full-year revenues from Libya were expected to contribute about 30 per cent of the company's overall sales, but ended up contributing only two per cent.
"Despite challenges related to events in Libya last year, we are very excited about our growth projections," said company president Jack Elliott.
"The political climate in Libya is stabilizing and we expect to resume work there in 2012."
Pure expects to restart operations once it reaches an agreement regarding the timing of payments. Libya-based customers have indicated they will honour all existing contracts and outstanding amounts.
Meanwhile, the company said it has significantly improved its performance in the Americas and other regions and has secured multi-year work with big cities.
It is currently sitting on a backlog of existing contracts worth more than $44 million, which will help drive revenue growth in future quarters, the company said. The backlog is expected to be cleared within 12 to 18 months.
Equipment sales fell by 48 per cent and consulting revenues were down 33 per cent, due to the situation in Libya. However, inspection services revenues gained seven per cent, while monitoring and technical support revenues were up 41 per cent.
Operating expenses dropped 13 per cent from the prior quarter to $9.7 million.
For the full year, the company swung to a loss of $6.9 million from a year ago profit of $2.3 million. Revenue declined 11 per cent to $43.1 million.
(Source: Canadian Business)