Downer lifts half-year profit, says turnaround 'on track'
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The news: Engineering and services contractor Downer EDI says its turnaround is "on track" after notching a 4.7% increase in half-year net profit.
The numbers: Statutory net profit for the six months to December rose to $75.5 million from $72.1 million a year ago, although revenue was down 6.5% to $5.22 billion. The company will pay an interim dividend of 10.8 cents a share, a significant increase from the 6 cents a share from a year ago.
The context: Managing director Peter Tomkins said Downer’s ability to generate strong cash conversion and margin improvement despite varied market conditions demonstrated the progress with its turnaround, two years into its business transformation program.
Transport segment earnings were up 32%, energy and utilities earnings rose nearly 39%, while facilities earnings were up 5.6% in the period.
The company said it has started negotiations with French transport group Keolis to sell its 49% stake in joint venture Keolis Downer, which last year lost the contract to operate Melbourne’s Yarra Trams. It expects market conditions to remain “varied,” and is targeting full-year net profit in the range of $265 million to $280 million.
The source: ASX announcement
