Mining services company Downer EDI is lifting final dividend despite reporting a 61% fall in net annual profit for the year to June.
Net profit fell from $181.5 million to $71.4 million because of previously announced write-downs of its mining business, a loss on the sale of its freight rail business, and the costs associated with its partial takeover of services group Spotless.
Underlying net profit after tax and before amortisation of acquired intangible assets in the year ended June 30 totalled $296.5 million, up a touch from the $295 million Downer had forecast.
Downer will pay a final dividend of 14 cents a share, up from the 12 cents in the 2016-17 year. Total revenue for the Group increased by $4.8 billion, or 61.5%, to $12.6 billion because of the inclusion of Spotless (around 87% owned).
Downer shares ended flat on $7.51.
Underlying net profit after tax and before amortisation of acquired intangible assets (NPATA) in the year ended June 30 totalled $296.5 million, slightly ahead of the $295 million Downer had forecast.
Downer said yesterday that transport revenue increased by 30.8% to $2.8 billion due to continuing strong performance by the roads business in Australia and New Zealand, and ongoing investment in transport projects in Australia.
Utilities revenue rose 17.5% to $1.8 billion, due to continuing strong contributions from nbn contracts in Australia as well as new renewable energy projects.
Spotless’ revenue for the 12 months was $3.1 billion with the major contributors to this result were Government-related contracts in the defence, health and education sectors, Public Private Partnerships (PPPs), construction projects and lifecycle maintenance contracts.
Rail revenue increased by 37.5% to $1.2 billion driven by the Sydney Growth Trains and High Capacity Metro Trains projects as well as continued strong performance on the Waratah maintenance contract. This result was achieved despite the divestment of the freight rail business. A significant portion of the increase relates to pass-through revenue to the manufacturing construction partner on Sydney Growth Trains.
EC&M revenue increased by 19.9% to $2.4 billion as a result of increased activities on the Ichthys project in the Northern Territory and a full year contribution from Hawkins. This increase was partially offset by a reduction in activities on the Gorgon and Wheatstone projects in Western Australia.
Mining revenue increased by 4.5% to $1.4 billion, mainly due to increased activities at Roy Hill iron ore mine in WA and Goonyella coal mine in Qyeensland and contributions from joint ventures and new contracts. These partially offset the completion of the Boggabri contract in the first half and the Christmas Creek (iron ore) contract in FY17.
