Leighton Holdings CEO, Wal King, seems to going all out to make the market aware that the company is on track to make its guidance.
Last week it released details of around $1.5 billion of new or renewed contracts, on top of announcements of another $800 million since early May.
On Monday it announced that the "scope of work has been completed on Victoria’s M80 Ring Road Upgrade, between the Calder Freeway and Sydney Road, with the contract finalised at $623m."
Yesterday Mr King appeared in an interview on Open Briefing where he reiterated that the company is on track to achieve its expected full year profit and has a strong balance sheet.
Mr King said that five year targets of $29 billion of revenue, $900 million net profit and $50 billion of work at hand were achievable.
This compares with work in hand of $A37.5 billion as at the end of March 2010 and expected revenues of $A18.5 billion and net profit of $A600 million in the year to 30 June.
He said the company had indicated earlier this year that it was looking for work in hand of $A50 billion, revenue of $A29 billion and net profit after tax of $A900 million in five years time.
"These are not forecasts, they are aspirational targets.
"We previously announced that we would be in excess of $A600 million of profit after tax for FY2010 and that is where we still sit," Mr King said yesterday.
"We’re still dealing with post GFC (global financial crisis) issues but, in the main, we are in the right part of the world with the right opportunities in front of us."
Mr King said several resource projects would not go ahead in Australia unless the federal government made changes to the proposed resource super profits tax.
"The black cloud hanging over the resource business is the super tax and no one knows the answer of what will happen there.
"If the government maintains their line, then a number of projects will not go ahead in Australia.
"We hope common sense will prevail and the super tax will be modified to some extent. If it’s not modified, it is an unthinkable situation that brings in a great cloud of uncertainty and investment risk.
"It runs completely across the concept of Australia being a very stable place to invest in."
Mr King said existing projects, where money had already been sunk and the operation set up, would continue.
Mr King said that by the end of July Leighton expected to finalise between about $2.5 billion and $3 billion worth of mining contracts and extensions in Australia.
He said Leighton would look at establishing a mining business in Africa because a number of projects would go there if the proposed super profits tax on resources in Australia was introduced.
"The other positive for Leighton is that we’ll take the opportunity to invest overseas to support our clients in Indonesia, Mongolia or other parts of the world where we operate our contract mining business," he said.
Leighton Asia’s offshore mining activities are focused primarily on Indonesia and Mongolia.
Mr King said Leighton was optimistic about the mining work in these countries as they were very low-cost environments, particularly Mongolia.
"Mongolia is a fantastic opportunity for us.
"We now have $A2 billion worth of work there with the potential for that to increase over the period ahead by at least another billion dollars.
"For example, we recently secured a A$273 million, six-year contract to develop and operate Mongolia Energy Corporation’s Khushuut coal mine in western Mongolia.
"This is expected to eventually result in up to five to six million tonnes of coking and thermal coal production each year, after it ramps up.
"Mongolia has a huge amount of untapped resources, and is dependent on the rate at which they can sell both thermal coal and coking coal to either China or Russia."
Mr King said Leighton was making progress working through the issues in the Middle East.
He said while overall business in Dubai remained difficult; it was no longer the company’s major or only market in the region.
"It’s a moving target in terms of our confidence in the Middle East business, albeit we believe the worst is over in terms of a general collapse of market confidence in the Middle East.
"We believe over the next 12 months we will secure sufficient new work to underwrite the business and its carrying value and we are comfortable with our position at this point."
Mr King said he did not foresee any write-downs related to investment in the Middle East or any other investments.
He revealed that the company is looking to win a half a billion dollar tunnel contract in the northwest of India and, "We are in the final stages of negotiating a major job in the northern part of the Persian Gulf for $US700 million".
He said he expected decisions on both next month.
Leighton shares eased 17c to $32.29.
