ASX-listed services provider, Hyro (ASX:HYO), has posted a $10 million drop in revenue for the first half of its financial year, citing the economy and “negative legacy issues” as the main culprits.
The company’s annual revenue dropped from $36.43 million in the first half of 2008 to $26.34m in the first half of 2009. However, it managed to turn a pre-tax loss of $4.54m in H1, 2008 to a profit of $1.22m in 2009.
The results come at the end of a busy year for Hyro and five months after it sold its services provider arm, Synergy Plus, to ComputerCorp. While the sale has the potential to be worth $9.3m, it is dependent on the subsidiary’s performance and could sink to a minimum of $6.5m.
Last month, liquidators for failed US banking giant, Lehman Brothers, reached an agreement to discharge Hyro’s $20 million convertible note and associated interest obligations. The deal came on the back of Hyro buying $3 million of Commander’s managed services contracts.
In an ASX director’s statement, the company remained optimistic about the future thanks to the signing of major deals and significant cost-cutting.
“Overhead expenses per dollar of revenue have been reduced by 30 per cent compared to June year-to-date last year,” the statement said. “The ongoing commercial focus of the business and the improved systems and controls will result in continued improvement in the profitability and cash flow in the second half of 2009.”