The Downer Group delivered a solid first half result for financial year 2010 and we are on track to deliver our
five-year Strategic Plan.
We have continued our Zero Harm journey to deliver world class safety and sustainability outcomes, with a lost time injury frequency rate of 1.06 and reductions in our carbon footprint through innovative energy and product efficiency programs across the Group. Whilst our performance to date is indeed world class, we remain focussed on the delivery of our Zero Harm goal.
We have made great progress to empower our people and the themes of empowerment and engagement of our work teams are now accepted as key leadership attributes across the company.
We aim to employ our team members for the long term and provide multiple career path opportunities across the group in order to better attract and retain world-class people who know and live the Downer client value proposition.
We are engaging more closely with our key clients to better align our service offerings to meet their precise needs and this approach has allowed us to develop a record work-in-hand of $16.4 billion. This record work-in-hand solidly underpins the forward work and growth volumes for the Group.
Our Synergies Program is developing a leaner, fitter business, capable of delivering sustained growth and performance whilst further supporting a more integrated ‘One Downer’ approach to our markets. The Group is well placed to capitalise on the strengthening market opportunities that are evolving throughout the Asia Pacific region.
We remain focussed on the delivery of our Strategic Plan, which we first outlined in June 2008. The robustness of this plan was proven during the recent global financial downturn and it has also positioned the Group well to take full advantage of the growth opportunities ahead.
Geoff Knox
Managing Director and CEO
- Safety performance – LTIFR: 1.06 per million
hours worked,
a 43% improvement - Net profit after tax of $87.0 million, up 1.9% on pcp
- Earnings before interest and tax $140.2 million, up 1.2% on pcp
- Operating cash of $165.2 million, up 6.3% on pcp
- Total revenue of $2.8 billion
- Sound balance sheet with gearing1 at 29%
- Earnings per share2 of 26.2 cents in line with pcp
- Dividend per share 13.1 cents
- Work-in-hand of $16.4 billion
2 Excludes ROADS.
pcp – previous corresponding period.
LTIFR – Lost Time Injury Frequency Rate.
Works
- Delivered revenue of $1.0 billion and EBIT of $46.7 million, an increase of 1 per cent.
- The Works business performed well in tighter markets, benefiting from ongoing government spend.
- Work-in-hand of $5.3 billion demonstrates solid forward demand for Works’ services.
- Infrastructure markets remain sound in Australia and Asia, but softer in New Zealand.
Engineering
- Delivered revenue of $869.8 million and EBIT of $57.5 million, a decrease of 11 per cent. The performance reflects the decision not to pursue lower margin work at the bottom of the business cycle and a softening in the New Zealand consulting market.
- EBIT margin improved to 6.6 per cent, up from 6.3 per cent, reflecting further cost efficiency gains during the period.
- Engineering secured a number of contracts during the half with major clients, including TransGrid, Woodside Petroleum and BHP Billiton.
- Work-in-hand of $2.9 billion is complemented by a pipeline of over $15 billion of future opportunities.
Mining
- Delivered revenue of $483.5 million and EBIT of $37.0 million, an increase of 73 per cent.
- The Mining business benefited from an improved operational performance, cost efficiencies and contribution from joint ventures.
- Work-in-hand of $2.5 billion includes significant wins and renewals during the half with clients including BHP Billiton Iron Ore, Ensham Resources, Solid Energy (NZ) and Fortescue Metals Group.
- The pipeline of opportunities for Mining continues to exceed $5 billion.
Rail
- Delivered revenue of $458.0 million and EBIT of $29.1 million, an increase of 3 per cent.
- The Rail business strengthened key relationships with major clients including BHP Billiton, Queensland Rail and Pacific National, securing additional orders for locomotives during the half.
- Work-in-hand of $5.7 billion is further supported by opportunities in the build and maintenance markets for locomotives and passenger trains.
- The NSW Waratah prototype four-car set is undergoing final static testing, and the first eight-car set is being fitted out, at Rail’s Cardiff facility. Practical Completion of the first train is targeted for late calendar 2010.
- The recently awarded KDR joint venture is successfully delivering tram services in Melbourne, adding to our Rail Solutions capabilities.