Leighton reiterates full year guidance
Construction giant Leighton Holdings Ltd has reiterated that it is track to achieve its expected full year profit and has a strong balance sheet.
Leighton chief executive Wal King said that targets of $29 billion of revenue, $900 million net profit and $50 billion of work at hand were achievable.
"We previously announced that we would be in excess of $A600 million of profit after tax for FY2010 and that is where we still sit," Mr King said in a statement on Tuesday.
"We're still dealing with post GFC (global financial crisis) issues but, in the main, we are in the right part of the world with the right opportunities in front of us."
Leighton Holdings said earlier this year it aspired to have work in hand of $A50 billion, revenue of $A29 billion and net profit after tax of $A900 million in five years.
This compares with work in hand of $A37.5 billion as at the end of March 2010 and expected revenues of $A18.5 billion and net profit of $A600 million in the year to 30 June.
Mr King said several resource projects would not go ahead in Australia unless the federal government made changes to the proposed resource super profits tax.
"The black cloud hanging over the resource business is the super tax and no one knows the answer of what will happen there."
"If the government maintains their line, then a number of projects will not go ahead in Australia.
"We hope common sense will prevail and the super tax will be modified to some extent. If it's not modified, it is an unthinkable situation that brings in a great cloud of uncertainty and investment risk.
"It runs completely across the concept of Australia being a very stable place to invest in."
Mr King said existing projects, where money had already been sunk and the operation set up, would continue.
Mr King said that by the end of July Leighton expected to finalise between about $2.5 billion and $3 billion worth of mining contracts and extensions in Australia.
He said Leighton would look at establishing a mining business in Africa because a number of projects would go there if the proposed super profits tax on resources in Australia was introduced.
"The other positive for Leighton is that we'll take the opportunity to invest overseas to support our clients in Indonesia, Mongolia or other parts of the world where we operate our contract mining business."
Leighton Asia's offshore mining activities are focused primarily on Indonesia and Mongolia.
Mr King said Leighton was optimistic about the mining work in these countries as they were very low-cost environments, particularly Mongolia.
"Mongolia is a fantastic opportunity for us. We now have $A2 billion worth of work there with the potential for that to increase over the period ahead by at least another billion dollars."
Mr King said Leighton was making progress working through the issues in the Middle East.
He said while overall business in Dubai remained difficult, it was no longer the company's major or only market in the region.
"It's a moving target in terms of our confidence in the Middle East business, albeit we believe the worst is over in terms of a general collapse of market confidence in the Middle East.
"We believe over the next 12 months we will secure sufficient new work to underwrite the business and its carrying value and we are comfortable with our position at this point."
Mr King said he did not foresee any writedowns related to investment in the Middle East or any other investments. © 2010 AAP
Leighton chief executive Wal King said that targets of $29 billion of revenue, $900 million net profit and $50 billion of work at hand were achievable.
"We previously announced that we would be in excess of $A600 million of profit after tax for FY2010 and that is where we still sit," Mr King said in a statement on Tuesday.
"We're still dealing with post GFC (global financial crisis) issues but, in the main, we are in the right part of the world with the right opportunities in front of us."
Leighton Holdings said earlier this year it aspired to have work in hand of $A50 billion, revenue of $A29 billion and net profit after tax of $A900 million in five years.
This compares with work in hand of $A37.5 billion as at the end of March 2010 and expected revenues of $A18.5 billion and net profit of $A600 million in the year to 30 June.
Mr King said several resource projects would not go ahead in Australia unless the federal government made changes to the proposed resource super profits tax.
"The black cloud hanging over the resource business is the super tax and no one knows the answer of what will happen there."
"If the government maintains their line, then a number of projects will not go ahead in Australia.
"We hope common sense will prevail and the super tax will be modified to some extent. If it's not modified, it is an unthinkable situation that brings in a great cloud of uncertainty and investment risk.
"It runs completely across the concept of Australia being a very stable place to invest in."
Mr King said existing projects, where money had already been sunk and the operation set up, would continue.
Mr King said that by the end of July Leighton expected to finalise between about $2.5 billion and $3 billion worth of mining contracts and extensions in Australia.
He said Leighton would look at establishing a mining business in Africa because a number of projects would go there if the proposed super profits tax on resources in Australia was introduced.
"The other positive for Leighton is that we'll take the opportunity to invest overseas to support our clients in Indonesia, Mongolia or other parts of the world where we operate our contract mining business."
Leighton Asia's offshore mining activities are focused primarily on Indonesia and Mongolia.
Mr King said Leighton was optimistic about the mining work in these countries as they were very low-cost environments, particularly Mongolia.
"Mongolia is a fantastic opportunity for us. We now have $A2 billion worth of work there with the potential for that to increase over the period ahead by at least another billion dollars."
Mr King said Leighton was making progress working through the issues in the Middle East.
He said while overall business in Dubai remained difficult, it was no longer the company's major or only market in the region.
"It's a moving target in terms of our confidence in the Middle East business, albeit we believe the worst is over in terms of a general collapse of market confidence in the Middle East.
"We believe over the next 12 months we will secure sufficient new work to underwrite the business and its carrying value and we are comfortable with our position at this point."
Mr King said he did not foresee any writedowns related to investment in the Middle East or any other investments. © 2010 AAP
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