Leighton profit rises by 33 per cent

Leighton Holdings’ annual profit has been boosted by the sale of John Holland.

The construction giant posted a 33 per cent increase in full-year net profit to $676.5 million.

However the company’s continuing operations posted a loss of $112.8m compared to a profit of $226.9m a year earlier.

Work in hand from continuing operations was over $30 billion at 31 December 2014 and Leighton said the composition reflects a more disciplined approach to pre-contract risk assessment as well as the momentum shift from resources to infrastructure development in Australia.

In 2015, Leighton expects to report NPAT in the range of $450 million to $520 million with the forecast range driven by substantial improvement in margins, from improved project delivery, continuation of the current cost saving program and reduced finance costs from the deleveraging of the balance sheet.

Leighton CEO Marcelino Fern√°ndez Verdes said 2014 was a transformative year for the company.

“We have made significant progress on our restructuring initiatives, produced a sustainable reduction in overheads and, through divestments and operating cash inflows, deleveraged and de-risked the balance sheet,” Verdes said.

“Our restructuring activities will be ongoing in 2015 with further improvements to our margin expansion initiatives to be delivered.”

Leighton has decided to pay a special dividend of 15 cents per share in addition to a final dividend of 53 cents per share.

Last year Spanish firm Hochtief increased its share in Leighton from 58.77 per cent to almost 75 per cent and since that time has embarked on a wide-reaching review of the company and its business arms.

Hochtief quickly flagged plans to change the structure of the business model of Leighton’s five companies.

Hochtief announced it would simplify its operations in to four new divisions – construction, mining, public-private partnerships (PPPs), and engineering.

It sold John Holland for $1.5 billion in December to China Communications Construction Company.

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

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