The directors of Leighton Holdings Limited today announced a 6% increase in operating profit after tax and minorities to $71.0 million ($67.3 million last year) from a pre-tax profit of $107.8 million.

A fully franked interim dividend of 17 cents was also announced by the directors representing a 6% increase (16 cents, franked to the extent of 70% last year).

The directors have reviewed the value of the Group’s investments in unlisted entities (other than mining), which has resulted in the revaluation of the residual value of the 20% investment in Nextgen Networks from $47 million to zero. A conservative revaluation of the 15% share in the Star City Casino management company has also been recognised.

Chief Executive, Mr Wal King AM, said that the Group’s operating result reflected an excellent performance across the diversified contracting activities in both Australia and Asia.

Operating revenue for the six months was $2.62 billion ($2.44 billion last year) with principal sources including engineering and infrastructure $904 million, mining and resources $862 million, building and property $496 million, telecommunications $269 million, and environmental services $91 million.

“Work in hand at 31 December has grown to $8.6 billion, with the finalisation of contract negotiations for the Australian Magnesium project in Queensland and the award of construction of the Spencer Street Station redevelopment. However, this does not include the $470 million of work from the acquisition of Transfield Construction,” said Mr King.

“The upswing in civil and building construction in Australia, as well as some major property development and resources infrastructure opportunities, should contribute to ongoing record levels of work in hand.

“The Group expects construction of the $1.5 billion Western Sydney Orbital to start soon and a whole raft of other transport infrastructures opportunities are emerging. Bids have just been submitted for the $800 million Lane Cove Tunnel in Sydney and we expect that the $1.8 billion Mitcham-Frankston Bypass in Melbourne will come out to bid later this year,” he said.

“Whilst the Group continues to have a very strong position in the contract mining market, we expect growth to come from some large processing developments in the resources sector. Our companies are actively pursuing a number of these projects currently in the planning stage, which will involve substantial engineering and construction work.

“We also see increasing opportunities in the non-residential building and property markets over the next few years. This market is forecast to strengthen through until 2006, driven by office developments, health, education, defence and hotels,” he said.

“While the longer-term outlook remains positive for Asia, economic growth for the next few years could remain constrained by the current global uncertainty. The Group has retained a good level of work in Indonesia and Hong Kong, which will drive activity levels, and will continue to pursue a number of construction opportunities in Malaysia and other countries across the region. 

“The Group’s financial capability remains strong with total assets up by 4% to $2.1 billion and net assets up by 12% to $869 million. Net cash was reduced to $222 million as at 31 December 2002, due to increased working capital requirements and the Group’s investment in Nextgen,” said Mr King.

“Revenue for the full year is expected to be over $5.5 billion with higher levels of activity in Australia. The Group expects a stronger operating profit in the second half and to report an increased profit for the full year.

“The directors remain very positive about the Group’s long-term outlook and its ability to continue to generate good returns for shareholders,” said Mr King.

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