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Downer makes $11.1m loss on impairments

Simone Ziaziaris  |  21 Feb 2018Text size  Decrease  Increase  |  
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SYDNEY - [AAP] Downer EDI (ASX: DOW) has posted an $11.1 million first-half loss, dragged down by a goodwill impairment on its mining operations, writedowns from its freight rail divestment and redundancy costs from its recent acquisition Spotless.

The engineering company had previously announced a $77 million goodwill impairment on its mining business after it failed to renew two material contracts.

On Wednesday, Downer said $40 million in writedowns from the freight rail divestment and $9.9 million in management redundancies and transactions costs from its takeover battle for services group Spotless--of which it now owns 87.8 per cent--had also weighed on the company's profit.

Total revenue from ordinary activities rose 74 per cent to $5.8 billion for the six months to December 31, with a big boost from Spotless, which contributed $1.5 billion.

Earnings before interest and tax fell 56.7 per cent to $52.3 million.

Revenue from transport, utilities, rail, mining and engineering, construction and maintenance (EC&M) all rose in the six months.

Downer maintained its target for underlying net profit after tax and amortisation (NPATA) of $295 million for the 2018 financial year, including underlying NPATA of $202 million for Downer and $93 million for Spotless.

It declared a 50 per cent franked interim dividend of 13 cents, compared to a fully franked 12 cents in the prior corresponding period.

Downer shares were up eight cents, or 1.2 per cent, to $6.78 at 1049 AEDT.

IMPAIRMENTS WEIGH ON DOWNER:

* Net loss of $11.1m vs profit of $78.2m

* Revenue up 74pc to $5.8bn

* 50pc franked interim dividend of 13 cents vs fully franked 12 cents

 

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is an AAP journalist.

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© 2021 Australian Associated Press Pty Limited (AAP) or its Licensors. This is the Morningstar service with content provided by AAP where indicated. AAP reserves all rights, including copyright, in services provided by it. The information in the service is for personal use only, does not constitute financial product advice (whether general or personal) and may not be re-written, copied, re-sold or re-distributed, framed, linked or otherwise used whether for compensation of any kind or not, without the prior written permission of AAP. You should seek advice from a professional financial adviser before making decision to acquire or dispose of a financial product.

This service is published for general information purposes only without assuming a duty of care. AAP is not in the business of providing financial product advice (whether personal or general advice), and gives no warranty, guarantee or other representation about the accuracy of the information or images contained in this service. AAP is not liable for errors, omissions in, delays or interruptions to or cessation of the services through negligence or otherwise. The globe symbol and "AAP" are registered trademarks.

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