Leighton Holdings Ltd., Australia's biggest construction company, tripled its profit growth forecast as a mining boom and road projects pushed its order book to a record. The company's stock surged.
Net income will increase at least 45 percent to about A$400 million ($312 million) in the 12 months to June 30, from A$276 million a year earlier, Sydney-based Leighton said in a statement today. Work-in-hand reached a record A$20.1 billion.
Chief Executive Wal King is benefiting from soaring demand for commodities, which creating work for the company's contract mining services, and road and other infrastructure projects in Australia. He has also tapped developing markets in the Middle East and Macau, where Leighton is building the A$1.7 billion City of Dreams casino.
``This is blowing the lights out,'' said Simon Thackray, an analyst at ABN Amro Holding NV in Sydney. ``Work in hand has beaten most expectations, and the profitability of projects has increased.''
Leighton shares surged A$1.94, or 7.7 percent, to A$27.17 at 1:42 p.m. in Sydney, and earlier reached a record A$27.90. The stock has jumped 34 percent this year, the biggest gainer on the benchmark S&P/ASX 200 Index, amid speculation the company's German parent, Hochtief AG, may be taken over and broken up.
First-half net income rose 61 percent to A$190 million, the company said today, beating the A$155.1 million median estimate of three analysts Bloomberg News surveyed by e-mail. The profit included a A$18.6 million gain from the sale of investments such as a stake in Downer EDI Ltd.
`Positive' Outlook
The outlook for the next few years is ``very positive,'' King said. The company expects a ``substantial improvement'' in earnings in fiscal 2008, he told reporters in Sydney.
Work-in-hand, which measures projects scheduled to be completed within five years, jumped 35 percent in the half.
Australia is catching up after years of underinvestment in roads, rail, water and electricity, and China's ``almost insatiable demand'' for minerals and energy is stoking investment in the mining industry, the company said.
In Australia, Leighton is working on a A$2 billion toll road in Brisbane, the capital of Queensland, and a A$700 million desalination plant on the state's Gold Coast. King this month bought a 40 percent stake in Queensland-based home builder Devine Ltd. to tap demand in the nation's fastest-growing state.
The value of engineering and construction work needed in Australia is equal to about 10 percent of the nation's A$927 billion economy, according to Kerry Duce and Stewart Ferns, analysts at Merrill Lynch & Co. in Sydney.
Macau Casinos
King is also expanding into Asia and the Middle East to tap demand. Leighton is building a A$518 million equestrian center in Qatar and is in talks to build a A$400 million extension to Wynn Resort Ltd.'s hotel and casino complex in Macau, which has surpassed Las Vegas as the world's biggest gaming market.
The company may win another casino project worth a ``couple of billion dollars,'' King told reporters.
``Macau's gaming boom is fueling some large construction projects, which will underwrite activity levels for a number of years,'' he said.
The company has net cash of A$702 million, allowing it to make further acquisitions, King said.
Leighton will pay a first-half dividend of 45 cents a share, up from 25 cents a year earlier. Hochtief's Herbert Luetkestratkoetter was today appointed to the board, replacing the German company's retiring CEO Hans-Peter Keitel.
source:www.bloomberg.com
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment