Leighton profits up on divestments

The company booked a net gain of AU$ 424 million (US$ 329 million) on the sale of John Holland to CCCCI in December last year. Meanwhile the rolling of its 50% of its Services businesses into a joint venture with Apollo Global Management brought a pre-tax net gain of AU$ 550 million (US$ 426 million).

However, these gains were eroded in the full-year figures by an AU$ 675 million (US$ 524 million) charge which the company describes as a “Contract debtors provision.” It said this was to cover the risk of unrecoverable payments due to it on various contracts.

All the same, the company plans to pay a special dividend of AU$ 0.15 (US$ 0.12) per share on the windfall from its disposals in addition to an ordinary dividend of AU$ 0.53 (US$ 0.42) which is based on a 60% ratio of Leighton’s underlying net profit.

Commenting on the results, executive chairman and CEO Marcelino Fernandez Verdes said, “In 2014 we commenced the transformation of our company. We have made significant progress on our restructuring initiatives, produced a sustainable reduction in overheads and, through divestments and operating cash inflows, deleveraged and de-risked the balance sheet. Our restructuring activities will be ongoing in 2015 with further improvements to our margin expansion initiatives to be delivered.”

Leighton said it expected its net profits for 2015 to be between AU$ 450 million and AU$ 520 million (US$ 350 million to US$ 405 million). This is lower than the 2014 figure, which had the benefit of being lifted by divestments. Commenting on its forecast, a company statement said, “The forecast range is driven by substantial improvement in margins, from improved project delivery, continuation of the current cost saving programme and reduced finance costs from the deleveraging of the balance sheet.”