Australian contractor Leighton Holdings Limited revises down its full year 2010/11 financials with expected AUD 427 million of loss versus its previous guidance for an after tax profit of AUD 480 million.

The revision is primarily due to write backs of expected profit on the Airport Link project in Queensland and the Victorian Desalination Project, and an impairment of Leighton’s investment in the Habtoor Leighton Group.

Mr David Stewart CEO said that “We are acting decisively to deal with write backs on these two problem projects and with the investment in the Middle East. While it is very frustrating to have to deal with the financial consequences, it does now leave Leighton well positioned to return to more normalized growth and earnings in 2011/12 and beyond.”

Mr Stewart said the Airport Link Project in Brisbane, the Thiess John Holland joint venture has continued to encounter design, access, weather, engineering, planning and coordination difficulties that have delayed the works and increased the forecast costs to complete the project which giving extra costs.

The executive added that “Normally we would not review the carrying value of HLG until June but due to deteriorating cashflow from legacy projects and the requirement for the injection of AED1 billion in additional shareholder loans, we believe it prudent to review the carrying value of HLG.”

Leighton said the conditions for business in the Middle East are still volatile, recovery of receivables has not improved and the winning of new projects remains slow.

(Sourced from www.theindonesiatoday.com)