Leighton reports good first half with performance on track for improved full year result

Issue Date:  16 February 1999
Issued By:  Leighton Holdings Limited

The Directors of Leighton Holdings Limited today announced an interim profit after tax and minorities of $48.5 million, up 16% compared with $41.7 million last year.

A fully franked interim dividend of 12 cents per share (11 cents last year) was announced by the Directors.

The Group's balance sheet remains in a very strong position with net assets of $614 million and net cash of $215 million.

Chief Executive, Mr Wal King AM, said the result was driven by the Australian contracting operations with relatively good returns from Asia given the difficult economic environment.

Total revenue for the half was up 7% to $1.65 billion with around 80% generated in Australia. Principal sources of revenue were civil engineering $568 million, contract mining $395 million and non-residential building $385 million. Other major revenue sources were telecommunications $92 million, process engineering $91 million and environmental services $63 million.

"Construction activity and contract mining will continue at a high level for the remainder of the year," said Mr King.

"Some large projects and new business opportunities are being pursued which should underpin our workload in the longer term, despite the likelihood of growth slowing in the construction and mining markets in Australia.

"Rail construction is expected to remain at recent high levels. Our ability to sponsor and develop major infrastructure projects such as the $3.5 billion Very High Speed Train between Sydney and Canberra could provide significant opportunities.

"Expenditure on roads should stay at a reasonable level and we are pursuing some major privatised port developments," he said.

"Revenue from building contracts has increased but there is less work on the horizon. Health is an area of opportunity given the big increases in funds being allocated by state governments.

"The Group's contract mining and related infrastructure work continues to be driven by a number of large coal projects being undertaken by Thiess," said Mr King. "Our ability to provide value added solutions to greenfields mining developments and productivity gains to existing operations should continue to generate opportunities.

"Prospects in Australia are also enhanced by the Group's presence in other businesses such as telecommunications.

"Whilst overall growth from Asia will be constrained, the outlook for the Group is positive in Hong Kong, the Philippines and Indonesia.

"Hong Kong should continue to be busy with building and engineering construction work coming out to tender from the government. The Philippines offers a good range of opportunities and is likely to become a more significant contributor to performance.

"Prospects in Indonesia largely revolve around major resources projects underway and we are well placed to capitalise on our existing presence and relationships," said Mr King.

In addition to existing businesses, a number of strategic investments and prospects to extend the range of activities already undertaken are being progressed.

A strong balance sheet and proven management skills place the Group in a good position to navigate the next few years and vigorously pursue opportunities.

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