HIGHLIGHTS
• Safety performance - LTIFR: 1.06 per million hours worked, a 43% improvement
• Total revenue of $2.8 billion
• Net profit after tax of $87.0 million, up 1.9% on pcp
• Earnings before interest and tax $140.2 million, up 1.2% on pcp
• Operating cash of $165.2 million, up 6.3% on pcp
• Sound balance sheet with gearing1at 29%
• Earnings per share2 of 26.2 cents in line with pcp
• Dividend per share 13.1 cents
• Work-in-hand of $16.4 billion
The Directors declared an interim dividend of 13.1 cents per share, payable on 9 April 2010, to shareholders on the register at 9 March 2010.
The Company’s Dividend Reinvestment Plan will apply for this dividend, with a discount of 2.5 per cent.
CEO and Managing Director, Geoff Knox, said the result demonstrates the ongoing strength of our portfolio. Looking forward, Mr Knox said, the business is well positioned to deliver NPAT growth in line with the aspirations of our strategic plan.
“The Group’s solid interim results were achieved during the early recovery stages of the global financial crisis, when business confidence remained low. As market conditions stabilise, we are well-placed to benefit from opportunities arising from strengthening markets in the Asia Pacific region,” Mr Knox said.
REVIEW OF OPERATIONS
Works delivered revenue of $1.0 billion and EBIT of $46.7 million, an increase of 1 per cent. The Works business performed well in tighter markets, benefiting from ongoing government spend. Work-in-hand of $5.3 billion demonstrates solid forward demand for Works’ services. Infrastructure markets remain sound in
Australia and Asia, but softer in New Zealand.
Engineering delivered revenue of $869.8 million and EBIT of $57.5 million, a decrease of 11 per cent. The performance reflects the decision not to pursue lower margin work at the bottom of the business cycle and a softening in the New Zealand consulting market. EBIT margin improved to 6.6 per cent, up from 6.3 per cent, reflecting further cost efficiency gains during the period. Engineering secured a number of contracts during the half with major clients, including TransGrid, Woodside Petroleum and BHP Billiton. Work-in-hand of $2.9 billion is complemented by a pipeline of over $15 billion of future opportunities.
Mining delivered revenue of $483.5 million and EBIT of $37.0 million, an increase of 73 per cent. The Mining business benefited from an improved operational performance, cost efficiencies and contribution from joint ventures. Work-in-hand of $2.5 billion includes significant wins and renewals during the half with clients including BHP Billiton Iron Ore, Ensham Resources, Solid Energy (NZ) and Fortescue Metals Group. The pipeline of opportunities for Mining continues to exceed $5 billion.cent.
Rail delivered revenue of $458.0 million and EBIT of $29.1 million, an increase of 3 per cent. The Rail business strengthened key relationships with major clients including BHP Billiton, Queensland Rail and Pacific National, securing additional orders for locomotives during the half. The NSW Waratah prototypefour-car set is undergoing final static testing, and the first eight-car set is being fitted out, at Rail’s Cardiff facility. Practical Completion of the first train is targeted for late calendar 2010. The recently awarded KDR joint venture is successfully delivering tram services in Melbourne, adding to our Rail Solutions capabilities. Work-in-hand of $5.7 billion is further supported by opportunities in the build and maintenance markets for locomotives and passenger trains.
OUTLOOK
“We continue to develop our capabilities to create greater value for our clients and shareholders. We have a highly experienced and capable leadership team which includes our recently appointed CFO, Grant Fenn and CEO Engineering, Eric Kolatchew.
“We are encouraged by the ongoing demand for our services. The robustness of our strategic plan combined with our excellent work-in-hand and growing pipeline of opportunities augers well for the Group’s continued success.
“We see no material change to our FY10 guidance of NPAT growth of around 5 per cent. We do however continue to monitor our end markets closely,” Mr Knox said.
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CONTACT DETAILS
Investors: Ross Moffat, Executive General Manager, Investor Relations, M: +61 412 256 224
Media: Maryanne Graham, Group Manager, Corporate Affairs, M: +61 407 252 230
Downer EDI Limited is an ASX-100 company providing comprehensive engineering and infrastructure design, construction, maintenance and management services to the transport, energy, infrastructure, communications and the resources sectors. The Group works across Australia, New Zealand, Asia and the United Kingdom.
Downer EDI Limited is an ASX-100 company providing comprehensive engineering and infrastructure design, construction, maintenance and management services to the transport, energy, infrastructure, communications and the resources sectors. The Group works across Australia, New Zealand, Asia and the United Kingdom.