Leighton half year results rise

13 February 2012

The rebound at Australian contractor Leighton has continued after it confirmed its underlying profit forecast of AU$ 272 million (US$ 185 million) for the six months from 1 July to 31 December, 2011

Leighton - a subsidiary of German contractor Hochtief, which itself is majority-owned by ACS - said its preliminary results showed revenues for the period totalled AU$ 12.2 billion (US$ 13.1 billion), up from AU$ 9.7 billion (US$ 10.4 billion) a year earlier.

Of this, the company said AU$ 10 billion (US$ 10.7 billion) was generated from the Australia and Pacific region, while AU$ 2.2 billion (US$ 2.4 billion) came from international operations.

The biggest market was infrastructure, which generated AU$ 6.7 billion (US$ 7.2 billion), while AU$ 4.4 billion (US$ 4.7 billion) came from resources, and property generated AU$ 885 million (US$ 952 million).

But the contractor reported a net AU$ 50 million (US$ 54 million) impairment on the value of its investment in its Middle Eastern subsidiary Al Habtoor Leighton group, which also impacted the group's results last year, and a net AU$ 49 million (US$ 53 million) impairment on its investment in toll-road developer BrisConnections.

Nevertheless, the company appears to have avoided the costly project overruns that had dragged its results down in the past.

Leighton CEO Hamish Tyrwhitt said, "Our major public-private partnerships - Brisbane's Airport Link and the Victorian Desalination Project - are drawing to completion. Both projects have stabilised during recent months and positive progress is being made."

Payments investigation

However, the positive results were overshadowed by news that Leighton has reported a possible breach of Australian laws relating to payments in Iraq.

The company said it had contacted the Australian Federal Police (AFP) over a possible breach of its code of ethics relating to payments that may have been made by its subsidiary Leighton Offshore in connection with work to expand offshore loading facilities for Iraq's crude oil exports.

Leighton said it was co-operating fully with the AFP as it conducts an investigation into the matter, adding that it was not yet known whether any illegal conduct had taken place, or whether there would be any adverse financial consequences for the company.

Mr Tyrwhitt said, "Our Code of Ethics and our values have been, and will continue to be, critical to our culture. Our values are consistently applied across the Leighton Group and deviations from those values are not tolerated."

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