Revenue was up 6% to $A17.9 billion from the same time last year, with net profit after tax of $444 million – up 40% on 3Q12 – and underlying net profit after tax of $389 million – up 65% on 3Q12.
Leighton also announced that it had secured $8.7 billion of new contracts, extensions and variations, leading to a healthy pipeline of work.
However the positive news was clouded by the increase in the company’s gearing to 39% – up 3% from the first half of 2013.
CEO Hamish Tyrwhitt said that while it was pleasing to report an increase in UNPAT, the elevated gearing level reflected the trade receivables position.
“We continue to forecast year-end gearing will be within the band of 25-35%, however, we are currently above where we expected it to be at this stage of the year,” he said.
“The final position will depend on the success of our working capital improvement initiatives.”
Tyrwhitt said gearing was affected in parts by the ongoing commercial negotiations with Chevron on the Gorgon project with regards to the value of Leighton’s Gorgon Jetty contract – which was already upped from $800 million to $1.85 billion mid-last year due to soaring costs and delays.
He said the company also took a hit from the latest bribery allegations, first reported by the Fairfax media group, that accused ex-Leighton executives of fostering a culture of bribery in the organisation’s international operations in order to win contracts.
The allegations were published as Leighton was waiting on late payments for completed work in Iraq. Tyrwhitt said the allegations delayed recovery of these funds.
Shares in Leighton fell sharply following the numerous media reports, from $19.58 to $16.74 in early October.
Leighton is also in a world of trouble with its shareholders, some of whom are mounting a class action against the company, alleging it failed to disclose allegations of bribery, corruption and investigated misbehaviour when they bought shares in the company in 2010-11.
Leighton denied the basis for the alleged claims and said it would “vigorously” defend the class action.
Turning to the future, Leighton reiterated full year UNPAT of $520 to $600 million, subject to market conditions and/or unfavourable developments.
“Since the end of the quarter, we have continued to win contracts in Australia and overseas, with government and global private-sector clients,” Tyrwhitt said.
“These have included a seven-year road asset management contract with the NSW Roads and Maritime Services; a three-year contract mining award in Queensland; and an airport expansion project in Dubai.
“Longer-term, we expect the increasing urbanisation and economic growth occurring throughout Asia to drive demand and underpin our addressable markets in Australia, Asia and elsewhere.”
Shares at Leighton Holdings were $17.26 in afternoon trade.
