Australian mining company Leighton Holdings Ltd., (LGTHF.PK,LEI.AX) on Thursday reported a 28% year-over-year drop in profit for the full year 2009, hurt by investment impairments and reduced property development contribution, despite a 26% increase in revenues. The company also provided net profit and revenue guidance for the full year 2010. However, despite reporting a drop in profit the company's shares rallied with the group tipping a net profit of around A$600 million for 2010.
In a statement, chief executive, Wal King said, "This is our third largest profit and recorded in a period when many of our peers and other businesses have reported losses. Even with the investment impairments the Group earned an average return on shareholders funds of over 20%."
Sydney, Australia-based Leighton reported a 28% decline in profit to A$440.04 million for fiscal 2009, from A$607.89 million in the prior year. On a per share basis, earnings dropped 32% to 149.5 Australian cents from last year's 218.6 Australian cents.
The results were impacted by reduced property development contribution and an impairment of asset values for ConnectEast, RiverCity Motorway, BrisConnections, Devine and Macmahon.
Total revenues for the quarter rose 26% to A$18.32 billion from A$14.54 billion reported for the full year 2008, including revenues from joint ventures and associates of A$5.04 billion that increased by 19%.
Market-wise, the Group's infrastructure division generated A$10.43 billion of revenues, resources division A$4.96 billion and property division A$2.92 billion. Activity-wise, the Group's construction activity generated revenues of A$11.71 billion, contract mining activity A$4.67 billion, services or operations and maintenance activity A$1.55 billion and development activity A$384 million.
Region-wise, the Group's Australia/Pacific region operations generated revenues of A$14.42 billion, and the Asian and Middle East regions operations generated A$3.90 billion in revenues. The Australia/Pacific region operations contributed A$471 million of profit before tax, down 11% from last year, while Asian and Middle East region operations reported a profit before tax of A$256 million, down from A$346 million a year ago.
At the end of 2000, work in hand remains close to record levels at A$37.01 billion, compared to A$30.30 billion at the end of 2008, boosted by the award of some A$25 billion worth of new work, extensions and variations during the period.
The Group's operating profit after tax was A$610 million, nearly flat with last year's A$608 million. Total expenses for the full year was A$12.91 billion, up from A$9.76 billion in the previous year. Depreciation of property, plant and equipment surged to A$642.10 million from A$442.48 million last year.
The company also announced a fully franked final dividend of 55 Australian cents per share, down from last year's 85 Australian cents bringing the 2009 full year ordinary dividend to a total of 115 Australian cents per share, down from 145 Australian cents last year.
The company noted that its balance sheet was further strengthened during the period with the successful completion of a A$700 million equity raising. The majority of the proceed have been invested in mining plant and equipment to support the Group's resources based activities in Australia and Indonesia. The company also improved it debt profile with the completion of a US$280 million private placement of 5, 7 and 10 year Guaranteed Senior Notes.
Looking ahead to 2010, Leighton Holdings expects full year revenue to exceed A$19 billion and a net profit after tax of around A$600 million, subject to any further asset impairments.
In the longer term the Group is well positioned, after a relatively flat operating performance in 2010, to revert to growth in 2011 and beyond, and to continue to deliver positive returns to shareholders.
In Friday's regular trading session, LEI.AX is currently trading on the Australian Securities Exchange at A$23.14, up A$2.11 or 6.80% on a volume of 0.80 million shares.
LGTHF.PK last traded at US$21.90 on August 5, 2009.
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