Leighton lifts Q3 profit

Group reiterates FY underlying profit guidance, says Iraq recovery hurt by Fairfax.

Leighton Holdings (LEI) has reiterated its full-year underlying profit guidance after posting a strong lift in profit for the nine months to the end of September.

In the nine months to September 30, Leighton posted net profit after tax of $444 million, a 40% increase on the $317 million in the previous corresponding period.

Underlying profit increased 65% to $389 million.

In the same period revenue was $17.9 billion, a 6% increase on $16.9 billion in the previous corresponding period.

Leighton said it still expects to report full-year underlying profit in a range between $520 and $600 million, subject to market conditions.

Leighton chief executive officer Hamish Tyrwhitt said that while it was pleasing to report an increase in underlying profit, the elevated gearing level reflected the trade receivables position.

“We continue to forecast year-end gearing will be within the band of 25-35% however we are currently above where we expected it to be at this stage of the year," he said.

"The final position will depend on the success of our working capital improvement initiatives."

The group said commercial negotiations with regards to the Gorgon Jetty project are ongoing and recoveries in Iraq have been delayed, in part, "due to the damage created by the recent media campaign conducted by the Fairfax Group".

“Longer-term, we expect the increasing urbanisation and economic growth occurring throughout Asia to drive demand and underpin our addressable markets in Australia, Asia and elsewhere," Mr Tyrwhitt said.