Downer EDI increases first-half profit, lifts full-year forecasts

Downer EDI has increased first-half profit 8.5pc and lifted annual guidance following large rail contract wins.

Downer EDI has had major rail contract wins in Victoria and NSW.

Downer EDI, one of Australia’s largest engineering contractors and service providers, posted an 8.5 per cent rise in first-half profit and increased its forecast for annual earnings, citing a strong performance across all its businesses and some large contract wins.

The company (DOW) reported a net profit of $78.2 million for the six months through to December, up from $72.1 million in the year-earlier period.

It said it will pay an interim dividend of 12 cents a share, the same as a year ago.

Downer raised its projection for full-year profit to about $175 million from $163 million previously, and chief executive Grant Fenn said the company was enjoying a “very strong operational and financial performance.”

In August, Downer cut its annual profit guidance to $163 million from roughly $170 million after failing to win a contract to build a new intercity train fleet in New South Wales state.

Downer said it recorded a write-off of $10 million in pretax bid costs.

“Work-in-hand has increased over 13 per cent during the half to $21.1 billion with major contracts wins in both Australia and New Zealand including High Capacity Metro Trains in Victoria and Sydney Growth Trains in New South Wales,” Mr Fenn said.

He said Downer is continuing to reposition its business to service increased investment and outsourcing in areas such as roads, rail, public transport and defence.

Dow Jones Newswires