Leighton lifts profit on strong oil and gas demand

A strong performance in infrastructure and oil and gas construction has seen Leighton Holdings post a 24 per cent increase in net profit to $152 million for the three months to December.

The contracting giant reiterated its guidance for an underlying net profit of $540 million to $620 million for 2014.

Revenue rose seven per cent to $5.7 billion, however work in hand fell three per cent to $40.9 billion.

The company said it secured $4.4 billion in new work during the quarter.

“Our markets are continuing to offer a good range of new project opportunities especially in infrastructure construction and we are confident that we are well positioned to participate,” chief executive Marcelino Fernandez Verdes said.

Reducing gearing from 47.2 per cent to 38.5 per cent, Verdes said the company was on track to trim this further to between 20-30 per cent by the end of the year.

Meanwhile, Leighton’s new majority shareholder Hochtief has again increased its hold on the company from 61.1 per cent to 62.6 per cent.

Leighton’s board has advised shareholders accept Hochtief's $1.2 billion, $22.50 a share takeover offer ahead of its May 9 deadline and the company’s annual general meeting on May 19.

Spanish construction group ACS owns more than 50 per cent of Hochtief and is aiming to create a streamlined global company.

It has previously stated that Leighton businesses such as Thiess, John Holland and Leighton Contractors could be "more efficiently structured."

In March Hochtief flagged plans to change the structure of the business model of Leghton’s five companies.

Hochtief said the review could alter the way Leighton Contractors, Thiess, John Holland, Leighton Asia, India and Offshore and Leighton Properties are managed and change ''the number and functions of employees'' as divestments of assets and businesses are looked in to.

Image: SMH

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