By Rhiannon Hoyle
SYDNEY--Leighton Holdings Ltd. (LEI.AU), Australia's biggest
construction company, signaled further progress in reducing its
debt pile as it targeted contract wins in Australia where state
governments are spending big on new roads and rail lines.
Sydney-based Leighton has been working to rebuild its balance
sheet and bolster its flagging share price after taking a hit in
recent years from problematic infrastructure projects and the
global financial crisis. It has been sharpening its focus on major
construction contracts such as airports and Asian casinos as global
mining sector investment slows.
On Thursday, the company reported an unaudited net profit of
430.2 million Australian dollars (US$377.5 million) for the nine
months through September, down 3% on a year earlier when profits
were bolstered by the sale of a majority stake in its
telecommunications assets. Underlying net profit for the period
rose 21% to A$470.0 million, it said, as the company cut capital
expenditure and widened its margins.
Leighton, controlled by Germany's Hochtief AG (HOT.XE), said it
had reduced net debt to A$949.8 million at Sept. 30 from A$1.49
billion a year ago.
"Looking at the balance sheet and cash flow, it is very pleasing
to note that gearing has continued its positive trend this year,"
falling to 33.7% in September from 39.4% the year earlier, said
Chief Executive Marcelino Fernandez Verdes. Gearing reflects the
company's debts relative to equity.
"The net debt reduction was driven by operating cash in-flow,
reduced capital expenditure and the collection of receivables, with
payables remaining stable," he said in a stock-exchange filing.
Leighton said government and private-sector investment in
Australian infrastructure was helping prop up its project pipeline,
having secured contracts on a rail development in Australia's New
South Wales state and a prison in neighboring Victoria.
Work-in-hand was A$37.7 billion at the end of September, flat on
three months earlier, it said.
Write to Rhiannon Hoyle at rhiannon.hoyle@wsj.com
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