The ALS Ltd (ASX: ALQ) share price has come under pressure on Wednesday following the release of its half year results.
In early trade the testing services company's shares were down as much as 4% to $9.40.
The ALS share price has recovered since then and is now down 1% to $9.69.
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How did ALS perform in the first half?
For the six months ended 30 September, ALS reported an 8.7% decline in revenue from continuing operations to $838.8 million.
This was driven largely by the negative impacts of COVID-19 pandemic on its first quarter performance which led to a 9.7% decline in quarterly revenue. Pleasingly, the company's revenues are improving, with second quarter revenue down 7.8% over the prior corresponding period.
The company's Life Sciences business was resilient and only posted a 3.5% decline in revenue. Whereas the Commodities business reported a 13% decline in revenue and the Industrials business posted a 17.1% decline.
On the bottom line, ALS posted a statutory net profit after tax of $70.3 million. This was down 48.1% on the prior corresponding period due to one-off gains from the sale of its China business a year earlier.
On an underlying basis, the company's net profit after tax from continuing operations was down 17.9% to $80.6 million. This excludes government subsidies and related direct costs.
The ALS board has declared an interim dividend of 8.5 cents per share fully franked. This is down from 11.5 cents per share a year earlier. Management notes that this reflects its prudent capital management strategy and demonstrates its strong liquidity position.
Outlook.
No guidance has been given for the full year, but management has provided an update on current trading.
It commented: "The first quarter of FY21 is expected to be the most challenging for the Group in this financial year due to economic shutdowns related to the COVID-19 pandemic. The sustained increase in global economic activity during the second quarter resulted in a significant improvement in performance across the Group. This trend has continued into early Q3."
