Downer Takes Hit On Mining Arm
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Downer EDI joined the impairments yesterday a $77 million pre-tax write-down in the value of its mining operations in its forthcoming interim results after what it called material contracts were not renewed.
"Mining's historic high levels of returns have reduced significantly due to non-renewal of two material contracts and delays in securing alternative contracts," Downer said on Monday.
"Downer remains positive in relation to mining's prospects, however the estimated future cash flows for the mining business do not support the carrying value of the previously acquired goodwill." The contractor said the goodwill impairment would be recorded as a non-cash, non-recurring item and would not alter its full year earnings guidance.
Downer reports interim results on February 21.
The shares fell 3.7% to $6.62.
Of greater interest for investors will be the impact of the acquisition of 87% of Spotless on Downer’s accounts and earnings.
Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.
At the AFR he was a finance writer, Finance Editor, News Editor and Chief of Staff. At the Nine Network he was supervising producer of Business Sunday for more than 16 years. He has also written for other online and analogue print publications here and overseas.