Leighton profits up 16% to record $156 million

Issue Date:  16 August 2001
Issued By:  Leighton Holdings Limited

The directors of Leighton Holdings Limited today announced a 16% increase in operating profit after tax and minorities of $156.2 million ($134.1 million last year) from a pre-tax profit of $196.8 million. The after tax return on shareholders equity averaged 22.3% for the year (21.1% last year).

A final dividend of 25 cents, franked at 50%, was also announced by the directors bringing the full year ordinary dividend to a total of 39 cents per share (up 18% from 33 cents last year).

Chief Executive, Mr Wal King AM, said that the Group’s excellent result reflected the success of its diversification strategy with a particularly pleasing result from the Asian operations.

“Asia performed very strongly with a solid performance from Thiess Indonesia and a substantial contribution from Leighton Asia. Profit before tax from Asia was up 51% to $83 million while revenue was up 70% to $1.3 billion,” said Mr King.

“The Group’s investment portfolio delivered profits with the sale of the 10.45% stake in the Eastern Distributor and a landmark property at 80 Pacific Hwy, North Sydney,” he said.

The balance sheet remains strong with total assets of $2.05 billion and net assets of $740 million. The Group is positively geared and retains net cash of $400 million at year end.

Operating revenue of $4.27 billion (up 24%) came from engineering and infrastructure $1.56 billion, building and property $1.05 billion, mining and resources $1.04 billion, telecommunications $437 million and environmental services $186 million.

Work in hand for the Group is at an all time record high of $7.83 billion ($6.21 billion last year) with a good spread across all major markets.

“A highlight was the finalisation of funding for the Nextgen Networks optic fibre cable project and the award of a $600 million construction contract and a 10 year operation and maintenance contract to Leighton Contractors,” said Mr King.

“Other major new infrastructure contracts included a $220 million share of the Alice Springs to Darwin railway awarded to John Holland.

“Thiess consolidated its position in the mining industry by investing in two more Australian coal mines and now has $3.25 billion worth of mining & resources work in hand. They have a strong presence in Indonesia and are securing significant levels of long term work by developing strategic relationships and taking equity positions in selected projects,” he said.

“Leighton Asia had an excellent year, particularly in Malaysia. Activity in the Philippines has rebounded recently with the awarding of two significant contracts since 30 June.

“The Asian outlook remains positive with $2.2 billion of work in hand in the region,” said Mr King.

“The record level of work in hand across the Group should translate into increased revenue and profitability next year.

“In the longer term, the Group has significant momentum. The strong base load of contract mining together with over $1 billion in long-term operation and maintenance contracts will provide a substantial level of recurring income which will assist in underpinning performance,” he said.

“A recovery in the engineering and infrastructure market is forecast towards the end of 2002 due to a number of large transport infrastructure projects currently in planning.

“The property market is also expected to strengthen from 2003 and Leighton Properties is initiating a number of developments in anticipation of this upturn.

“The combination of momentum, capacity to invest and new opportunities in the pipeline provides a positive outlook in the longer term,” said Mr King.

Mr John Morschel was appointed a director and deputy chairman of Leighton Holdings today. He replaces Mr Rod Wylie who retired after 16 years on the Board. As previously advised, it is the intention to appoint Mr Morschel as chairman following Mr Besley’s retirement after the Annual General Meeting in November.

The directors remain confident about the Group’s ability to continue delivering enhanced returns for shareholders.

ENDS.

Issued by:
Leighton Holdings Limited
ACN 004 482 982

For further information:
Mr Wal King AM
Chief Executive Officer
Ph:  (02) 9925 6912

Mr Dieter Adamsas
Deputy Chief Executive Officer and CFO
Ph:  (02) 9925 6923