excellent boardroom radio presentation , page-6

Thursday, 12 February 2009

Article from MineSupplyToday

Leighton shares gain despite profit slump LEIGHTON Holdings posted a 56% fall in profits for the first half of the 2009 financial year, but the news failed to scare off investors as company shares gained ground today.

Net profit slipped to $111.2 million, from $250.3 million a year earlier.

Leighton attributed the loss to the write-down of $239 million in investments in ConnectEast, RiverCity Motorway, BrisConnections, Devine and Macmahon Holdings, and a reduced property development contribution.

Last month, the construction company and contract miner flagged an expected 60% fall to about $100 million in first-half earnings and a 21% fall to approximately $480 million in full-year profit with write-downs of $170 million due to erosion of investment values by the global financial crisis.

There was some good news, with Leighton recording total sales of $9.15 billion in the six months ended December 31, up 40% from $6.54 billion in the same period the previous year.

For the full year, Leighton forecasts sales approaching $19 billion, an underlying profit of about $650 million, and net profit of $480 million, including write-downs, and a final dividend unchanged at 85c.

Work-in-hand also rose to $37.5 billion at December 31, compared with $30.3 billion at June 30, and $26.7 billion a year earlier.

Leighton will pay an interim dividend of 60c, unchanged from a year earlier.

9 March Shares begin trading ex Dividend
13 March Books close for Interim Dividend
31 March Interim Dividend paid

The company’s longer term outlook remains solid “based on a record level of work in hand, a strong competitive position and a forecast rebound in the group’s core markets from the current uncertainty of the global financial crisis,” chief Wal King said.

“The group’s major markets generating revenue were infrastructure ($5.2 billion), resources ($2.5 billion), and building and property ($1.5 billion).”

King said new mining contracts or extensions were awarded at the Bayan FKP coal mine in Indonesia, and the Curragh North and Moorvale coal mines in Queensland.

“While recent cutbacks have been announced by some iron ore and coal producers, the fundamentals for long-term growth, and therefore for the group, are sound,” he said.

The result comes as Leighton subsidiary Thiess announced it won a $US1.52 billion ($A2.3 million) contract extension from PT Arutmin Indonesia for the operation of the Senakin and Satui coal mines in South Kalimantan, Indonesia.

PT Arutmin Indonesia is a subsidiary of the Indonesian oil, gas and coal-focused company Bumi Resources.

Leighton Asia also said it has secured a $A350 million, six-year mining contract for the Ukhaakhudag coal mine project in Mongolia.

Shares in Leighton were up 6.23% to $18.59 by early afternoon, after a high of $19.40 early in the day.

Finished at $18.56