Downer EDI ekes out 1.9% gain in first-half profit as sales growth stalls

Thursday 25th February 2010

Downer EDI whose shares have more than doubled in the past 12 months, posted a 1.9% gain in first-half profit by reining in costs as revenue growth stalled.

Net profit rose to A$87 million in the six months to December 31, from A$85.4 million the year previous, according to a statement released by the company. Per-share earnings rose 7% to 24.5 cents. The company’s shares fell 3.1% to A$8.05 on the ASX.

“The group’s solid interim results were achieved during the early stages of the global financial crisis, when business confidence remained low,” said managing director Geoff Knox. “As market conditions stabilise, we are well-placed to benefit from opportunities arising from strengthening markets in Asia.”

One bright spot in the results was the performance of Downer EDI’s mining operations, which delivered a 73% increase in EBIT to A$37 million. That compares favourably to the company’s works and rail operations which posted marginal increases in EBIT of 1% and 3% respectively, while rail operations posted an 11% decline in EBIT.

Knox said Downer EDI’s outlook was positive and that the company was standing by its 5% net profit growth forecast for the fiscal year, although it would continue to monitor the company’s end markets closely. Work in hand amounted to A$16.4 billion.

The company will pay a first-half dividend of 13.1 Australian cents a share.

Businesswire.co.nz

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