Downer EDI has posted an $11.1 million first-half loss dragged down by a goodwill impairment on its mining operations, writedowns from its freight rail divestment and redundancy costs from its recently acquired Spotless.
The engineering company had previously announced a $77 million goodwill impairment on its mining business after it failed to renew two material contracts.
On Wednesday, Downer said $40 million in writedowns from the freight rail divestment and $9.9 million in management redundancies and transactions costs from its takeover battle for services group Spotless – of which it now owns 87.8 per cent – had also weighed on the company’s profit.
Total revenue from ordinary activities rose 74 per cent to $5.8 billion for the six months to December 31, with a big boost from Spotless, which contributed $1.5 billion.
Earnings before interest and tax fell 56.7 per cent to $52.3 million.
Revenue from transport, utilities, rail, mining and engineering, construction and maintenance (EC&M) all rose in the six months.
Downer maintained its target for underlying net profit after tax and amortisation (NPATA) of $295 million for the 2018 financial year, including underlying NPATA of $202 million for Downer and $93 million for Spotless.
It declared a 50 per cent franked interim dividend of 13 cents, compared to a fully franked 12 cents in the prior corresponding period.
Downer shares were up eight cents, or 1.2 per cent, to $6.78 at 1049 AEDT.
IMPAIRMENTS WEIGH ON DOWNER:
* Net loss of $11.1m vs profit of $78.2m
* Revenue up 74pct to $5.8b
* 50pct franked interim dividend of 13 cents, vs fully franked 12 cents