Profit turnaround for Leighton
31 October 2012
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Australian contractor Leighton reported net income of AU$ 308 million (US$ 319 million) for the nine months to 30 September, reversing the loss of AU$ 324 million (US$ 336 million) it registered for the same period in 2011.
Leighton –a subsidiary of German contractor Hochtief, a company which is itself majority owned by Spain’s ACS – said it had completed or substantially advanced troubled projects that had overrun and been responsible for dragging it to a full-year loss in 2011.
The company said it was also making progress on the recovery of money owed to its Middle East joint venture, Habtoor Leighton Group (HLG). In May this year, Leighton separated HLG into two parts - a legacy business which is dealing with outstanding money owed to the company from a number of projects, and an on-going business, which is being readied for sale through an initial public offering.
CEO Hamish Tyrwhitt said, “Moving ahead, as we rebase the business and rebuild our financial strength, we are developing the foundations for a successful and sustainable future.
“Importantly, our strategy of stabilise, rebase and grow is aimed at net margin expansion rather than top-line growth including cost and overhead reductions across the group. To this end, our immediate focus is on strengthening the balance sheet, with initiatives to reduce working capital requirements, tighten capital allocation and extend the duration of our financings.”
Mr Tyrwhitt said the company had finalised the sale of Thiess Waste Management for a net profit of AU$ 81 million (US$ 84 million).
“We have also sought expressions of interest for our non-core telecommunications infrastructure assets in line with our capital recycling strategy,” he added.
Leighton reported revenues of AU$ 16.9 billion (US$ 17.5 billion) for the nine-month period, compared to AU$ 15.8 billion (US$ 16.4 billion) last year.
