Good prospects emerging as Leighton expects improved profit

Leighton Holdings Limited today announced operating profit before tax (unaudited) for the nine months to 31 March 2002 of $156.9m and operating profit after tax (unaudited) of $110.7m. Operating revenue for the nine months was $3.7bn. Work in hand stood at $7.74bn with incomplete management contracts valued at $644m. This compares with $7.79bn of work in hand and management contracts of $730m at the half year. A summary of financial information for the quarter is attached.

Leighton Holdings’ Chief Executive, Mr Wal King AM, said that the company was on track to report another improved profit for the full year.

“The positive outlook for the full year has been driven by stronger Australian contracting activities and continuing solid performances from the Asian operations,” said Mr King.

“Some good prospects are emerging including the Australian Magnesium Corporation (AMC) Project in Rockhampton, Queensland. An interim Engineering, Procurement and Construction (EPC) Contract was signed recently between Leighton Contractors and AMC to develop the $1.3bn Stanwell Magnesium Plant. AMC have agreed to negotiate exclusively with Leighton Contractors on all key processes for the plant and anticipate signing the EPC Contract in the June quarter of 2002.

“During the quarter, John Holland strengthened its position in the Australian rail maintenance market with a $150m five-year extension to the WestNet contract. John Holland also completed the acquisition of Fletcher Construction in Australia, which adds $160m of work and some good prospects. Since a 70% stake in the John Holland Group was acquired just over two years ago, John Holland’s work in hand has almost doubled to $1bn,” said Mr King.

“Thiess was awarded further work on the upgrading of the Pacific Highway at Karuah in NSW, civil works at Comalco’s alumina refinery in Gladstone, Queensland and the construction of port facilities at Darwin.

“Leighton Contractors was awarded a mining contract at the St Ives gold mine in Western Australia and the construction of another section of the Bruce Highway upgrade on the Sunshine Coast in Queensland.

“In Asia the Group has $2.3bn worth of work in hand with a good spread across Indonesia, Hong Kong, the Philippines, Malaysia, Thailand, Vietnam and Singapore.

Leighton Asia recorded another solid quarter, securing a major residential project and construction of a satellite earth station in Hong Kong.  In Singapore, Leighton Asia has been appointed to construct a cement silo, their first work in that market for 9 years.

“Whilst no new contracts were secured in Indonesia, both Thiess and Leighton Asia continued to perform well on a number of large coal mining projects,” said Mr King.

“Thiess South America was awarded a contract in Peru to construct a leach pad at the Yanacocha gold mine and now has ongoing work at four mines in that country.

“The outlook for the next few years remains very positive with work in hand expected to grow significantly on the back of a number of large public and private sector projects.

Over $3bn worth of government infrastructure projects will go ahead in New South Wales and Victoria over the next 6 months. A further $3bn of major road and rail projects are likely to proceed over the next 3 years,” said Mr King.

“Selected iron ore and gold projects and an increasing level of activity in the resources and minerals sector are likely to offer further opportunities.

“The building and property market is set for an improvement from 2003 and the Group is pursuing a number of development opportunities to capitalise on this upturn. Health, defence and correctional facilities as well as some private sector manufacturing and commercial opportunities offer good prospects for building contracts.

“The outlook for Asia remains positive despite the relatively weak economic environment across the region. Contract mining operations in Indonesia and good levels of construction activity in selected markets should underpin performance, said Mr King.

The Board is confident that the Group will report an improved result for the full year.

Issued by:
Leighton Holdings Limited
A.C.N. 004 482 982  A.B.N. 57 004 482 982

For further information:
Ms Penny Bingham-Hall
Executive General Manager, Corporate
Ph:  (02) 9925 6641

Mr Justin Grogan
Manager, Investor & Media Relations
Ph:  (02) 9925 6628