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| Leighton announces impact of financial crisis on 2009 results Australian construction firm Leighton Holdings Ltd announced that the company’s results for this financial year will be impacted by the values of investments in Connect East, RiverCity Motorway, BrisConnections, Devine and Macmahon. At 31 December 2008, the value of listed investments had fallen by a further $200 million since 30 September 2008. The total asset write downs for the six months will reduce the half year result by $170 million after tax. In the last few years, the Australian government started major projects to improve transportation infrastructure. Many projects, e.g. toll roads, are realized as concession projects in cooperation with private-sector partners. Leighton is also involved in projects of this type. For years now, infrastructure funds, pension funds and private investors have been showing great interest in these projects as asset class. This is not least one reason why many projects are independently listed on the stock market at a very early stage already. During the financial crisis, the share prices of these listed project companies also dropped. As, however, their business prospects have not changed, the current stock prices do no longer reflect the infrastructure projects' real worth. CEO, Mr Wal King, said that the performance of the Group operating companies continues to be strong, with the exception of Leighton Properties. Work in hand has increased to approximately $37 billion at the end of December compared to $35.3 billion at 30 September, 2008. The operating result for the six months to 31 December, prior to the impact of investment values, is expected to be approximately $270 million which is an increase of 8% on the previous year. For the full year, the company expects to report an operating result after tax of approximately $650 million, up 8% compared to last year’s operating result of $608 million. The group reported profit will be affected by the write down of investment values. write your comments about the article :: © 2009 Construction News :: home page |