Gearing was at 36%, down from 47.7% in the previous quarter, while cash inflows from operating activities stood at $148 million.
Leighton’s work in hand for the period stood at $40.1 billion, down 5% on the previous quarter – although the company had won a further $3.9 billion of contracts since June 30.
Leighton CEO Hamish Tyrwhitt said the results demonstrated the resilience of the group’s strategy and operations.
“The result demonstrates the strength of our business model and the relevance of our strategy amid challenging market conditions,” Tyrwhitt said.
“Leighton’s diversity – not just by market sector, geography and brand, but also by contract type and size, activity and customer – allowed the group to withstand headwinds in contract mining during the period and enabled us to deliver an improved operating performance.
“There are still challenges within our business. However, for each challenge we have a clear pathway to resolution and we are making good progress.”
The results show a great turnaround for the company, whose half-year profit had fallen 25% to $216.7 million in 2011 due to loss-making operations in the Middle East.
More recently, the contractor also suffered write-downs at major Australian projects, including the Victorian Desalination Plant and Brisbane’s AirportLink M7.
While Leighton’s ‘stabilise, rebase and grow’ strategy accounts for much of its strong performance, its bounce back was also attributed to work secured in Australian LNG construction and for Asia-Pacific social and economic infrastructure.
The sale of 70.1% of the group’s non-core telecommunications assets to Canadian Ontario Teacher’s Pension Plan earlier this year also participated in strengthening the group’s balance sheet and reducing gearing.
Tyrwhitt said during the second half of 2013, Leighton would accelerate the rebase element of its strategy in order to expand the underlying NPAT margin and position itself to meet the infrastructure demand in global markets, with particular emphasis on Asia.
“Once the rebase phase of our strategy is complete, Leighton will be well-positioned for our next phase of growth,” he added.
“The Asia region is projected to experience significant economic expansion over the coming years.
“This expansion will require considerable infrastructure investment. With 38 years’ experience in Asia we are well positioned, geographically and operationally, in what will be one of the key growth markets of the world during the next 50 years.”
With a focus on further improving margin, Leighton expects to deliver a 2013 full-year underlying NPAT within $520 to $600 million and a gearing level within the target band of 25% to 35% by year-end, subject to market conditions and any unforeseen circumstances.
Despite the result, Leighton shares dropped 5.3% to $16.36 today.
