Leighton Asia News, July 2005 - Leighton Holdings

Leighton on
track for
increased
profit
Moody’s assigns
rating of Baa1
Wal King.
Leighton Holdings is on track to achieve a full-year profit of A$180 million.
This follows its announcement in May of an operating profit after tax
unaudited) of A$115.8 million for the nine months to 31 March 2005.
Operating revenue for the nine months
was A$5.4 billion. Work in hand stood
at A$14.9 billion.
Leighton Holdings’ chief executive Wal
King reported that it had been a very busy
period for the Group, with a number of
projects converted.
“Work in hand has held up very well,
driven by the award of new road, services
and building projects around Australia,”
he said.
“In April, the Group’s financial strength
was re-affirmed when Moody’s Investors
Service (Moody’s) initiated a credit rating
of the Group.
“Moody’s assigned an issuer rating of
Baa1 to the company (equivalent to
Standard & Poors’ (S&P) current BBB+
rating) and a rating of Baa2 to Leighton’s
A$200 million Convertible Subordinated
Notes issue. This is one notch higher than
S&P’s current BBB+ rating.
“We are very pleased with the outcome of
the rating review which gives the Leighton
Group one of the highest ratings of any
project developer and contractor, anywhere
in the world.
“This rating reflects Moody’s expectation
that the Leighton Group will maintain its
strong position in Australia’s buoyant
construction and mining market.”
Wal said that the Australian construction
market remained in the midst of a
transport-led upswing and a number
of large road projects now commencing
should provide a substantial base of
activity over the next few years. In
addition, projects such as the tolling of
the Pacific Highway and the recently
announced ‘South East Queensland
Infrastructure Plan and Program
2005-2026’ – worth up to A$55 billion
over the next 20 years – should provide
further opportunities.
“The commercial and industrial property
markets remain strong and are forecast to
remain so for at least another few years.
The Group has about $1.4 billion worth of
building and property work in hand, with a
substantial amount driven by Leighton
Properties, which has built a strong
portfolio of development projects,”
he said.
He said he expected the Asian region to
continue to provide a good contribution for
the next few years, underpinned in part by
Indonesia and the large, long-term mining
contracts the Group has there.
“Hong Kong has a solid base load of
infrastructure work and construction of the
Kuala Lumpur to Putrajaya highway has
resumed, which will underwrite activity
levels for the next few years in Malaysia,”
he said.
The outlook for the next few years remains
very positive with record levels of work in
hand providing a platform for growth in
revenue. The directors expect to report full
year revenues of around A$7 billion and
an increased operating profit for the full
year of at least A$180 million.
page 21