Leighton posts $317M profit

LEIGHTON Holdings has shrugged off a forgettable 2011, posting a profit of $A317 million for the nine months ended September 30, 2012.
Leighton posts $317M profit Leighton posts $317M profit Leighton posts $317M profit Leighton posts $317M profit Leighton posts $317M profit

 

Jon Cuthbert

The profit — posted almost a week earlier than expected — turns the tables on the comparable period last year in which the firm recorded a loss after tax of $325 million.

The positive result comes despite heavy financial losses on the Airport Link project in Brisbane and the Victorian desalination plant project.

Commenting on the result, Leighton chief executive officer Hamish Tyrwhitt said the group continued to deliver solid operating results, made progress on legacy issues and advanced its strategy to “stabilise, rebase and grow” the business.

“In the three months to September 2012, we completed Airport Link and substantially advanced the Victorian desalination project with the granting of preliminary commercial acceptance following commissioning of stream one,” he said.

“Last week, we completed testing on stream two and we remain on target for handover by the end of this year.”

Tyrwhitt acknowledged conditions in the Middle East remained a challenge but contracts had recently been awarded in both Qatar and Saudi Arabia.

Other major project wins since July 1, 2012 include contract mining at the Lake Vermont coal mine and Solomon iron ore mine in Australia, construction of the Australian embassy in Jakarta and work on the Gladstone and Ichthys gas projects in Queensland and Western Australia respectively.

Tyrwhitt said the company was on track to meet December profit expectations of $400-450 million, despite a minor slowdown in the mining sector.

“Our work in hand as at 30 September 2012 was $45.3 billion, which was broadly in line with

June 2012 levels after adjusting for the sale of Thiess Waste Management and foreign exchange movements,” he said.

“While our addressable market continues to provide us with opportunities in Australia and overseas, we are experiencing some minor slowdown in activity in the mining sector, albeit this has not impacted on our 2012 financial year forecast.”

Tyrwhitt said the company’s stabilise, rebase and grow strategy was aimed at net margin expansion rather than top-line growth including cost and overhead reductions across the group.

He added the firm would focus on strengthening the balance sheet, with initiatives to reduce working capital requirements, tighten capital allocation and extend the duration of the company’s financings.

This article first appeared in ILN's sister publication MiningNews.net.

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