Leighton reports 10% increase in operating profit and over $6 billion work in hand

Issue Date:  17 August 2000
Issued By:  Leighton Holdings Limited

The directors of Leighton Holdings Limited today announced a 10% increase in operating profit after tax and minorities of $134.1 million ($121.8 million last year) from a pre-tax profit of $201.4 million.

An unfranked final dividend of 20 cents announced by the directors brings the full year ordinary dividend to a total of 33 cents per share (30 cents last year).

Chief Executive, Mr Wal King AM, said that the Group had an excellent year due to its strategy of diversifying by industry, service and geography.

“Improved results from Asia, telecommunications work, contract mining and environmental services have offset reduced returns from the construction tender market in Australia,” said Mr King.

Operating revenue of $3.45 billion (up 7%) came from engineering and infrastructure $1,099 million, mining and resources $907 million, building and property $927 million, telecommunications $307 million and environmental services $205 million.

“Our Asian operations recorded a 15% jump in profit and more than doubled the level of work in hand to over $2 billion. The total level of work in hand at June is at an all time record of over $6 billion,” said Mr King.

“Telecommunications has the potential to become one of the most significant markets for the Group in the years ahead.

“Leighton Contractors’ new subsidiary, Vytel, will bring a greater focus to its provision of integrated services and infrastructure to the telecommunications industry.

“The $850 million Nextgen Networks project will create a substantial workload for Vytel over the next few years and the joint venture with Leighton Asia opens up some exciting opportunities in emerging regional markets,” he said.

“Transport infrastructure is another market with significant potential for both construction and maintenance contracts.

“Prospects are promising for the $4.8 billion Speedrail project, the very high speed train link between Sydney and Canberra. Leighton Contractors and ALSTOM, the preferred developer, are awaiting a final decision from government.

“The $1.2 billion Alice Springs to Darwin railway should commence later this year and will provide around $200 million work to John Holland.

“Thiess has sustained an excellent level of mining work. A highlight was the award of a $778 million coal mining contract from BHP in Indonesia. Further rationalisation in the Australian coal industry is set to continue and will present opportunities for the provision of integrated, value-added services,” said Mr King.

“The outlook for Asia is promising with an upsurge in economic activity in most countries coinciding with record levels of work for the Group. With over half this work in resources projects, Indonesia has become our biggest Asian market.

“Hong Kong should keep providing a good work load from government spending on infrastructure and Malaysia will increase its contribution as a result of over $600 million in new work won,” said Mr King.

The record level of work across Australia and Asia will translate into a substantial increase in revenue in the year ahead. Profitability should also increase.

The balance sheet remains solid with total assets of $1.73 billion and net assets of $685 million. The Group remains positively geared with net cash of $250 million at year end.

The directors remain very positive about the Group’s overall outlook and its ability to create value for shareholders in the longer-term.

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
Director, Finance & Administration
Ph: (02) 9925 6923