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US expansion puts Biwater into profit

Exit from tricky foreign operations and expansion into US helps contractor

EXPANDING into the US and cutting workload in less profitable overseas regions has helped process contractor Biwater edge back into the black.

The firm, which made a £100,000 pre-tax profit in the year to March 2004 compared to a £2.2 million loss in 2003, changed strategy last year.

Chairman David White said: 'Our plans to eliminate lossmaking contracts and subsidiaries have been expensive but successful.'

In the latest accounts, Biwater took a £7.3 million hit from unidentified costs.

Mr White added: 'Work on over $350 million (£195 million) of our contracts in Central America and Africa has now started and is expected to contribute substantially to group earnings over the next three years.'

Biwater's turnover swelled £6.1 million to £185 million, mainly as a result of new orders in the US flooding in, but workload was watered down drastically in Africa.

The firm is still operating in Africa and has signed a $102 million (£57 million) water and sewage scheme in Tanzania.

Another sewage scheme in Panama that took four years to build should also start contributing to group profits in the 2005 financial year after starting operations this year.

Biwater made an operating loss of £600,000 last year but operating profits in the latest accounts lifted to £2.8 million.

This was helped by a joint venture with Dutch outfit Nuon, which is in the black.

Turnover from joint ventures fell £1.3 million to £24.2 million but pre-tax profits from this sector rose £1.9 million to £5.5 million.