The West

Leighton expects  profit to lift as projects finish
Leighton expects profit to lift as projects finish

Construction giant Leighton Holdings expects profit to increase threefold in the second half of 2012 after completion of its troubled Brisbane Airport Link and Victorian desalination project.

Leighton today posted a $115 million profit for the six months to June 30 and also reconfirmed its guidance for a full year profit of between $400 million and $450 million.

This excludes the capital gain on the sale of Thiess Waste Management Services announced on July 9.

In February the company forecast that its full year profit would be between $600 million to $650 million.

Only a month later this was shaved by more than $200 million due to write-downs on the airport link and desalination plant projects.

However, with the completion of the airport link on July 23 and the Victorian desalination plant due to be finished by the end of the year the company expects a much improved performance in the second half.

"While the Airport Link and Victorian Desalination projects have had a considerable financial impact on the group, they are among the most complex engineering projects ever undertaken in this country," chief executive Hamish Tyrwhitt said.

"Completion of such iconic projects reinforces our reputation for delivery of major projects."

Mr Tyrwhitt said the implementation of better risk assessment procedures combined with a change of culture at the company towards a less "gung-ho" attitude was creating more certainty about projects.

"They're (the procedures) designed for better certainty of financial outcome," he said.

But he said while growth opportunities were available the company's main focus was on improving the quality of its earnings and improving the bottom line.

"We're coming through a period of reshaping, and repositioning and rebuilding the group," he said.

"We're still seeing a very strong addressable market across both Australia and Australasia and we're seeing a good growth potential but our focus is very much on improving the quality of our earnings, improving results on the bottom line and looking at synergies across the group."

Leighton recently changed its reporting period from financial to calendar year which means there is no direct comparison to this first half.

But profit for this half is down $225 million, or 66 per cent, from the $340 million it posted in its last first half which ended December 31, 2011.

When compared to the six months ending June 30, 2011, profit is up $741 million, or 118 per cent, from a loss of $626 million.

At 1.23pm Leighton shares were down 29.5 cents, or 1.76 per cent, to $16.43.

The West Australian

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