Leighton Confident of Maintaining Record Work Levels

Issue Date:  14 August 2003
Issued By:  Leighton Holdings Limited

The directors are pleased to report that Group operating profit after tax and outside equity interests was $140.0 million ($169.2 million last year). This result includes the write-off of the investment in Nextgen Networks, which had a $40 million impact on profit after tax.

 A fully franked final dividend of 27 cents was also announced by the directors bringing the full year dividend to a total of 44 cents per share (up 5% from 42 cents last year).

Chief Executive, Mr Wal King AM, said that the result reflected a strong underlying result with solid performances across the Group’s diversified activities in Australia and Asia.

“Asia produced an increased profit, despite the adverse impact of an unfavourable exchange rate, with Indonesia, Hong Kong, Malaysia and the Philippines all contributing well,” said Mr King.

“The Group’s Australian contracting activities produced a very good result although this was impacted by Nextgen. In addition, Leighton Properties significantly increased its contribution from property development activities,” he said.

Total operating revenue of $5.62 billion (up 7%) came from engineering and infrastructure $1.86 billion, mining and resources $1.95 billion, building and property development $1.08 billion and operations and maintenance $528 million.

  “The Group has a record level of work in hand of $9.7 billion and the prospect of maintaining work at these levels given the number of construction opportunities still emerging in Australia. The order book has been boosted by some major projects such as the WestLink M7 (formerly the Western Sydney Orbital), the Central Reclamation project in Hong Kong, the KENS property development project in Sydney and the acquisition of contracts from Transfield,” said Mr King

“Transport infrastructure will be a key driver of growth this year as a number of significant projects awarded over the last 12 months begin to ramp up. In addition, the Group is well placed on a number of other major projects including Sydney’s Lane Cove Tunnel, the Perth-Mandurah rail line and Melbourne’s Mitcham-Frankston Freeway.

“The outlook for the non-residential building and property market remains positive, fuelled in part by $1.7 billion worth of Leighton Properties’ property developments currently underway. Investment levels in property are forecast to remain strong until mid-decade and a range of industrial and commercial opportunities are being pursued. In addition, the non-residential building market is expected to provide a good level of work over the next few years.     

“The Group has maintained a strong position in the mining market securing over         $1 billion of new contracts during the year. The outlook for investment in the resources sector remains positive.

“The Group has over $1 billion worth of operations and maintenance (O&M) work in hand and is targeting growth in this area. Leighton Contractors has recently created a new division, Leighton Services, to strategically focus on existing O&M work and to pursue road, rail, facilities management, defence and telecommunications opportunities.

 “A few large construction projects in Hong Kong and the Philippines, as well as contract mining operations in Indonesia, should support activity levels in Asia. The Group is pursuing some other large contract mining opportunities in Indonesia and transport infrastructure prospects in Malaysia,” said Mr King.

The balance sheet remains strong with total assets of $2.1 billion and net assets of $871 million. The Group’s net cash was $387 million at 30 June 2003.

The directors are confident the Group will post an improved result in 2003/04.

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

For further information:
MR WAL KING
Chief Executive Officer
Ph:  (02) 9925 6912

MR DIETER ADAMSAS
Deputy Chief Executive Officer & CFO
Ph:  (02) 9925 6923