The Energy Action Australia Ltd (ASX: EAX) share price is down 50% to 45 cents this morning after the energy trader warned investors to expect net profit for the first half of FY 2019 to be 50% lower than the prior corresponding half.
The company also reported that it expects "to generate positive operational cashflows before interest, tax, and significant items of $1.7 million in the first half of FY19". However, operational revenue and aforementioned net profit are expected to be "materially behind" the prior period.
The group blamed the weak result on a number of factors including the impact of a "strategic review", lower auction volumes and tenders, alongside "unexpected delays in project delivery for the project management and advisory (PAS) services business".
Energy Action Ltd firmly falls within the micro-cap category, with only $4,000 worth of shares traded today to collapse its value in half. The poor liquidity alone likely to put off many investors as it makes it harder to buy into or exit the stock and adds to the wild share price swings such as today's.
Energy Action reports that it has implemented a plan to cut costs and refocus strategy in response to the disappointing start to FY 2019.
