Writedowns will have big impact on interim results, warns Australia's top contractor
Australia's biggest contractor, Leighton, has said that first-half profit will be down by 60% when the firm releases its interim results next month.
The firm, which is 55% owned by German giant Hochtief, blamed the global financial crisis for the predicted 60% fall in profit for the six months to December, driven by writedowns. It also warned that it expects full-year group profits to be down as a result.
Leighton said its investments in five schemes, including a road job in Melbourne, a toll road in Queensland and a tunnel project in Brisbane, had contributed to a A$200m (£97m) fall in the value of its investments in the final three months of the year.
In a statement, the contractor said: “The total asset writedowns for the six months will reduce the half-year result by A$170m (£83m) after tax.”
The firm also warned that planned new mines might not start because of the recession. This work accounts for around one-quarter of the firm's revenue, which in its latest full-year figures stood at A$14.5bn (£7bn). Pre-tax profit for 2008 was A$768m (£373m).
Last month, the firm's Middle East arm, Al Habtoor Leighton, and its joint-venture partner, South African contractor Murray & Roberts, were asked to stand down from the £400m Trump Towers hotel and office project in Dubai because of the global downturn. The scheme is being developed by local firm Nakheel, which had earlier announced it was cutting 500 jobs.