REPORTING SEASON: Downer EDI (DOW)
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Figure 1: Downer EDI 12 month chart
Downer EDI (EDI) tough result in tough times, but rail still shining
Australian based mining engineering and services firm Downer EDI reported a larger than expected slide in profit for the 6 months till the end of December 2014. As expected the firm was hit by lower demand for services and loss of contract work over the period as major projects wound to a close.
Revenue from Downer’s mining unit fell 20% to $815.2million, below market expectations. Downer is restructuring and changing the assets it holds in its infrastructure unit bringing in its newly acquired (Oct 2014 for $300million) gas and electric services firm TENIX. The results from its rail division were promising even with a fall in revenue of 28% to $424.4million the businesses EBIT margin was stronger than expected up 4.1%.
DOW is on track to meet its previously published (Nov 14) NPAT FY15 forecast for $210million.
DOW cash flow is solid and CAPEX over the period fell and is set to continue to fall over time.
DOW will pay $0.12 interim dividend to shareholders on the 19th of March 2015