Leighton Cuts Loss Forecast on Airport Project Progress
Leighton Holdings Ltd. (LEI), Australia’s biggest builder, cut its full-year loss forecast, citing increased confidence that a airport infrastructure project will be completed within the contract deadline.
The company expects an after-tax loss of about A$408 million ($438 million) for the year ended June 30, down from the A$427 million loss forecast in April, Sydney-based Leighton said today in a statement. It confirmed guidance for profit between A$600 million and A$650 million this fiscal year.
Leighton, 54 percent owned by Germany’s Hochtief AG (HOT), has suffered delays and cost overruns while building the Brisbane Airport Link road and a desalination plant in Victoria state, prompting Chief Executive Officer David Stewart to flag changes to bidding procedures and possible asset sales. The Airport Link project is expected to be completed by the contractual date of June 30, 2012, Leighton said today.
“Airport Link is showing good progress with the gross loss reduced from A$730 million to A$520 million as a result of no longer needing to provide for liquidated damages and time- related costs,” Stewart said in the statement.
The Victorian project continues to be affected by weather and industrial issues, he said. “These and other factors have contributed to a further forecast deterioration of A$278 million, which is being recognized in the 2010-11 result.”
The company fell 0.4 percent to A$20 at the 4:10 p.m. close of trading in Sydney. Leighton is scheduled to report earnings on Aug. 15.
David Saxelby, managing director of Leighton’s Thiess Pty Ltd. unit, will leave the company this year, the statement said. Bruce Munro will be acting managing director, it said.