Downer EDI upgrades profit guidance

Engineering firm upgrades its full-year profit guidance after identifying larger-than-expected cost savings.

Downer EDI CEO Grant Fenn

Engineering group Downer EDI has upgraded its full-year profit guidance after identifying larger-than-expected cost savings following its purchase of an 87.8 per cent stake in Spotless.

Downer upgraded its net profit guidance to $195 million from April’s $190m after a review identified $25m of cost savings.

“This reflects strong trading to date across all divisions other than mining, and will be achieved despite no contribution from the freight rail business in the second half of the year following the sale of that business to Progress Rail,” chief executive officer Grant Fenn said.

But the company expects Spotless’s profit to be at the bottom end of its previously issued $85m to $100m guidance after recording almost $80m in costs and impairments at the cleaning and catering firm.

It comes after the company announced flat full-year results for 2017 in August.

With AAP