Downer lifts NZ, Pacific revenue 10% as projects ramp up

Thursday 6th August 2015

Downer EDI, the Australian based infrastructure and mining firm, lifted revenue 10 percent from New Zealand and the Pacific as a number of projects came on stream and it benefited from favourable foreign exchange rate movements.

Revenue rose to A$1.27 billion from $1.15 billion across New Zealand and the Pacific, the Sydney based company said in a statement. Of that, Downer's New Zealand infrastructure unit, which designs, builds and maintains roads, telecommunication services and other utilities, increased sales 6.3 percent to A$1.2 billion. In New Zealand dollar terms, revenue gained 4.1 percent. Still, the NZ unit's earnings before interest and tax declined 6.2 percent to A$59.3 million, due to a A$5.9 million settlement the company reached over a leaky building claim.

"Infrastructure’s New Zealand business performed strongly with a ramp up of projects, lower overheads and favourable foreign exchange movements," Downer said in its annual report.

Downer reported a 2.7 percent decline in group profit to A$210.2 million on a 3.9 percent fall in total revenue to A$7.43 billion, which includes joint ventures and other income. The company is targeting net profit of about A$190 million in the 2016 financial year, saying it was difficult to predict due to "weakness and a high degree of uncertainty in a number of our end markets, particularly resources based construction and mining."

The board declared a final dividend of 12 Australian cents per share, unchanged from a year earlier, and taking the annual payout to 24 cents.

The ASX listed shares last traded at A$4.58, and have decreased 3 percent this year.

Downer's New Zealand unit maintained its "strong market share" with the New Zealand Transport Agency in a more competitive environment, and last year signed new agreements with telecommunications network operator Chorus to provide connections for some 300,000 homes.

The company changed its reporting structure during the year, carving up its Australian and New Zealand infrastructure divisions into transport, technology, utilities, and engineering service lines.

BusinessDesk.co.nz

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