Two key groups have shown positive results as the reporting season kicks off this week.
Posting their full-year results today, engineering group Downer EDI has lifted its full-year profit almost six per cent, while toll roads operator Transurban has recorded more than 40 per cent profit growth off the back of rising revenue.
Downer EDI’s profit rise came despite a slide in revenue from across its infrastructure, mining and rail businesses.
It made a net profit of $216 million for the 12 months to June 30, up 5.9 per cent from $204 million in 2013. But group revenue slipped 16 per cent to $7.37 billion.
Underlying profit was flat compared to 2013, which was hit by significant items.
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Downer EDI expects conditions to remain tough and is forecasting a five per cent slide in profit to around $205 million for 2014/15.
It expects to benefit from increased government spending on capital and services in the coming 12 months, but says the outlook for spending from the resources sector is less promising.
Chief executive Grant Fenn said weak conditions in the engineering and construction sector had caused a slide in revenue across the company’s mining, infrastructure and construction divisions.
“The mining-based construction and services markets were subdued during the year and each of the company’s three divisions – Infrastructure, Mining and Rail – reported lower revenue,” he said.
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Mr Fenn said the company had worked to cut costs and improve productivity, which resulted in a 16.5 per cent fall in total expenses for the year.
Downer EDI announced a fully-franked final dividend of 12 cents per share, up from 11 cents per share, franked at 70 per cent, a year ago. It brings the year’s dividend to 23 cents a share, compared with 21 in 2013.
It also announced plans to buy back up to 43 million shares on the market by August 20.
Transurban reported full-year profit up almost 44.5 per cent after increasing revenue across its toll roads.
The toll road owner made a profit of $252.2 million for the 12 months to June 30, up from $174.5 million a year ago.
Revenue from the company’s toll roads was up 13 per cent to $906.5 million.
Transurban chief executive Scott Charlton said the company had improved margins on six of its seven toll roads during the year.
He said the company was looking to continue to improve its performance over the next year, after taking control of Queensland Motorways, which operates Brisbane’s toll road network, at the start of July.
“The business is well positioned for the year ahead and we will continue to focus on driving operational improvements across our networks as well as delivering on our pipeline of enhancement projects,” he said.
In addition to the Brisbane roads, Transurban owns or part owns Sydney’s Eastern Distributor, Cross City Tunnel, M2, M5 and M7 and Lane Cove Tunnel roads and Melbourne’s CityLink, along with two roads in the US.
The company announced a final dividend of 18 cents per share, of which 3.5 cents are fully franked, up from 15.5 cents a year ago.
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