Downer EDI soars on 14% profit jump

The engineering services and mining contractor group posted a net profit after tax (NPAT) of $189.4 million, up from $165.8 million last year. The news saw Downer EDI’s share price soar as much as 15%, or $1.06, to an intraday high of $8.14 in morning trade.Total revenue jumped 6.3% to $5.9 billion, while earnings before interest and tax (EBIT) was $304.8 million, up 8.4% on last year. Operating cash flows gained 21.9% to $336.5 million while work-in-hand remains strong at $14.6 billion. “This is a pleasing result which demonstrates the robustness of the group’s business strategy,” Downer EDI chief executive and managing director Geoff Knox said. “The group delivered record earnings, securing new projects, and extending and renewing contracts with key clients.“We further strengthened our service offering and our geographical footprint with a number of bolt-on acquisitions in Australia and New Zealand.” Looking ahead, the company anticipates 5% growth in NPAT in financial year 2010 and is looking to build on its strong presence in infrastructure, oil and gas, renewable energy and water markets. “The group’s work-in-hand of $14.6 billion, achieved in tighter markets, provides a good indication of our ability to further grow the business,” Knox added.“New opportunities for organic growth present a sound forward outlook.” In the meantime, the company’s board has declared an unfranked final dividend of 16c per share, up from 12.5c per share last year. The final dividend takes the full year total to 29c, up from 25.5c last year.Shares in Downer EDI have cooled to $7.78, down 2c, in mid-morning trade.

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