Service Stream asks for more time to evaluate Syntheo

NBN contractor Service Stream has extended its trading halt and asked for more time to evaluate how the underperformance of its joint NBN construction venture Syntheo has affected its profit guidance.

Service Stream suspended its shares from trade on June 13 in order to complete a review of Syntheo, a joint venture with Lend Lease.

It requested a trading halt until today but this morning asked the ASX to grant it a further two week halt.

Syntheo was blamed by NBN Co for a downgrade in premises passed with fibre earlier this year, and later handed back the remainder of its NBN rollout work in the Northern Territory.

Service Stream is evaluating what effect such issues would have on its financial results for its 2012-2013 financial year. 

Syntheo’s exit from the Northern Territory is expected to cost Service Stream $3 million. The contract was worth up to $341 million. 

Service Stream’s share price has fallen steadily since Syntheo gave back the NT to NBN Co. It closed at $0.14 upon commencement of the trading halt, down from a January yearly high of $0.45. 

Syntheo still holds NBN rollout contracts in Western Australia for two years and $174 million, and South Australia, for two years and worth $141 million.