Downer EDI on the rise

DOWNER EDI has returned to profitability in the first half of 2012 on the back of its mining business and maintained its profit guidance for the full year.

Staff Reporter

The engineering contractor announced a net profit after tax for the period of $85 million, up 19% on last year, while earnings before interest and tax came in at $160.4 million, up 21%.

Total revenue was $3.9 billion, up 14.5%, driven by Downer Mining which reported a 79% increase in revenue to $1.1 billion and infrastructure division Downer Australia, which increased revenue by 8% to $1.7 billion.

Operating cash flow was $107.1 million after $83.4 million of cash outflows relating to the Waratah train project.

“We are clearing up the problems and transforming the business step by step,” Downer chief executive officer Grant Fenn said.

“Downer Mining continues to perform well, with strong revenue and EBIT growth from major new and expanded open cut mining contracts. The services side of Downer Mining also continues to be a focus with our blasting and tyre management businesses reporting good revenue and earnings growth.”

The company also confirmed its previous full year guidance of underlying EBIT of around $340 million and NPAT of around $180 million.

However, there was sad news for shareholders with the board deciding not to declare an interim dividend.

Today’s profit result comes after Downer won a $A64 million electrical and instrumentation contract for the iron ore processing plant at the $2.57 billion Karara magnetite project in Western Australia’s Mid West.

This story first appeared on ILN's sister publication MiningNews.net.

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