Slowdown in mining hits Downer's rail

Downer EDI says it will take some time for its rail business to adjust to the slowdown in the mining sector.

The engineering and maintenance company on Wednesday also said it still expects to deliver a flat underlying net profit in the 2014financial year.

Downer supplies and maintains passenger and freight train rolling stock in Australia.

"Our locomotive business has been affected significantly by the drop-off in mining demand," Downer EDI chief executive Grant Fenn told shareholders at the company's annual meeting.

"The transformation of our rail business will take some time. However, we believe there is a significant market for the rail services that we provide, particularly as state governments and private operators look to improve the efficiency of their operations and networks."

Downer said significant progress had been made on the NSW Waratah train project - under which it is delivering 78 eight-car trains for Sydney's rail network - over the past year.

Downer had delivered 59 passenger trains so far, and the 78th train was due for delivery in the middle of the 2014 calendar year.

Mr Fenn also repeated previous profit guidance earnings for the coming year were likely to be around $215 million.

This would be up slightly from last year's $205 million.