Construction giant Leighton Holdings has emerged from its scandal-filled 2013 with a higher than expected profit and predictions for a better result this year.
Leighton chief executive Hamish Tyrwhitt said the company had proved its resilience in a distracting year, cutting capital expenditure by 27 per cent and lifting profit despite a slowdown in the crucial mining sector.
Leighton again angrily rejected allegations on Thursday that its international operations were involved in rampant bribery and corruption, which is the subject of a federal police investigation, during a briefing to analysts.
Investors pushed the share price 80 cents higher, up 4.9 per cent, to $17.21 on Thursday, still well below the close to $20 it was at before last year’s scandal broke sending it plunging.
Leighton grew 2013 full year net profit by 13 per cent to $509 million.
The 30 per cent lift in underlying net profit to $584 million – excluding write-downs on property assets and investments – was above analysts’ expectations.
The company forecast 2014 net profit to be $540 million to $620 million based on strong mining activity and better margins as this year’s record revenue of $22.6 billion was forecast to stay steady.
“What is incredibly satisfying is looking at the end result where we got to irrespective of headwinds and other distractions and challenges we faced during the year,” Mr Tyrwhitt told AAP.
“My focus is on the present, ensuring the company has appropriate culture, appropriate business systems and appropriate governance.”
Work in hand increased to $42 billion despite losing $4 billion in contract mining, offset by rises in other infrastructure construction work and property development work.
“We’re across all sectors of infrastructure both social and economic … it was pleasing when our prime minister got elected and said he wants to be known as the infrastructure prime minister,” Mr Tyrwhitt said.
A long-term issue of collecting unpaid bills continues to dog Leighton, with a $1.3 billion blowout to $5.8 billion owed.
A key part of that was cost rises on the jetty that Leighton is building for Chevron’s Gorgon gas project, for which it is owed $1.4 billion and in negotiations.
Morningstar analyst Ross MacMillan said Leighton had done a good job increasing their work in hand when peers involved in infrastructure and construction mining had struggled to do so.
“To get investor confidence back Leighton really needs to resolve those (corruption) issues and keep itself out of newspaper headlines over the next 12 months,” he told AAP.
The most recent headline last week involved controlling shareholder Germany’s Hochtief increasing its stake to nearly 59 per cent ahead of Thursday’s financial results.
Both parties deny it was aware of price sensitive information.
