Engineering services provider VDM Group may sell property to pay down debt and aims to resume paying dividends next fiscal year as the value of orders from key clients for civil and mining projects recovers. The Perth-based company might spin off $20 million in property, including the sale and lease back of its Osborne Park corporate head office, the purchase of which only closed in October, chief financial officer Peter Simpson said. VDM yesterday cancelled its annual dividend to help conserve cash and warned it expected a full-year operating loss, prompting its shares to plummet as much as 20 per cent. The company hasn't ruled out a capital raising once it is more confident about future earnings. "That [a capital raising] hasn't been discussed at the board level," Mr Simpson told The Australian Financial Review. "At some point it might be on the agenda." The news underscores the patchy recovery in the resources sector, as smaller mining companies struggle to raise cash and depressed prices of some metals and minerals crimp investment. VDM's order book has shrunk to about $230 million from about $400 million this time last year, which includes Rio Tinto's cancellation of its underground expansion at its Argyle diamond mine. The value of VDM's work in hand may grow next fiscal year as orders flow from the federal government's stimulus spending. "We're actively bidding on a large number of contracts," Mr Simpson said. "We're cautiously optimistic." The company said yesterday it would take a loss of as much as $100 million, including between $75 million and $85 million in goodwill. The company, which has about $109 million in debt, has deferred plans to build an office park. VDM might need to take a $15 million charge to account for the falling value of property, the company said. Revenue for the current fiscal year will climb 10 per cent to about $450 million. The company didn't plan any further reductions to personnel, after reducing its workforce by about 200 to 1000 this year through redundancies and attrition, Mr Simpson said. To help offset slumping orders the company is shrinking costs by about a fifth, in part by sharing office space between its business units, which include consulting, construction, and its resource and infrastructure business. Moving the main office of its construction business to head office would save about $600,000, Mr Simpson said. Recent contract wins indicated potential for a turnaround, he added. Last month the company's 50-50 joint venture with NRW Mining was awarded a $240 million earthworks contract for CITIC Pacific Mining's Sino Iron project at Cape Preston in Western Australia.