now-the bad news

Sydney - Wednesday - Nov 10: (RWE Australian Business News) -
Clough Ltd today said the BassGas project had continued to be affected
by a number of issues that would delay completion.
Completion of the offshore works has been hampered by
restrictions in access and in the provision of offshore accommodation by
the client and progress at the onshore plant has been hit by the
offshore delay, as well as by productivity issues and weather delays.
As a consequence of the delays, Clough has incurred cost
increases, which are the subject of additional claims that have been
submitted to Origin.
These claims so far are for about $25 million and further claims
are under preparation.
"We intend to pursue these claims vigorously, but in line with
our accounting principles are not taking any of these claims to
account," CEO and managing director Mr David Singleton said in a
statement today.
Cost increases of $20 million in addition to provisions booked
last year have been recognised in the company's internal year-to-date
forecasts, which will have an impact on half-year results.
Mr Singleton said resolution of claims against the client in
respect of these cost increases appeared to be unlikely in the short
term given the approach adopted by the client in relation to claims so
far on the project.
Accordingly, no part of those claims has been included as
revenue.
"As a result, we are projecting a loss in the half-year of
approximately $18 million with second-half trading as per our previous
expectations leading to a near break-even position for the full year.
"We will provide a further update early in the New Year as the
project progresses through the next milestones," he said.
Mr Singleton added that other than the BassGas project result,
the underlying assumptions included in Clough's 2004/05 internal
forecasts remained consistent with previous views and advice provided
following the release of the 2003/04 results.
Shares in Clough fell 4c to 53c today.
ENDS
!END