Business Description:
Downer EDI (DOW) provides engineering and infrastructure management services to the public and private Minerals & Metals, Oil & Gas, Power, Transport Infrastructure, Communications, Water and Property sectors across Australia, New Zealand and the Asia Pacific region. DOW's business divisions comprise Downer Australia, Downer New Zealand, Downer Mining, Downer Rail, Downer Consulting, and Downer Asia.

Strategy Analysis:
The macro environment remains favourable, supported by high infrastructure spending from state governments, particularly in NSW and QLD where DOW has a strong presence. Organic growth is pursued through extending the maturity profile of the order book and increasing the level of repeat work. Bolt on acquisitions bring on board staff and experience in niche areas. Confidence seems to have been restored after several years of mismanagement. Exposure is diversified across the four main business divisions, each functioning autonomously. Downer EDI reported a net loss of $27.84m for the year ended 30 June 2011. Revenues from ordinary activities were $6.63bn, up 14.4% from last year. Basic and Diluted EPS was (10.5) cents compared to (2.4) cents last year. Net operating cash flow was $185.63m compared to $204.27m last year. No dividend was declared. The company has work-in-hand of around $20.0bn, is strongly aligned to the resources and energy sectors and is well placed to capitalise on the pipeline of opportunities driven by those markets. Subject general market conditions, the company expects to deliver EBIT of around $340.0m for the 2012 financial year and NPAT of around $180.0m.