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Shares in Australian builder Leighton Holdings Ltd slid 6 per cent Wednesday after half-year earnings figures undershot market expectations.
Leighton, 55-per-cent owned by Germany’s Hochtief AG, lifted net profit to 366 million Australian dollars for the six months to June 30, up 220 per cent from 114 million Australian dollars in the previous corresponding period.
The results disappointed the market however, sparking a sell-off that saw the share price tumble to 16.20 Australian dollars, down 6.4 per cent from 17.30 Australian dollars at the opening.
Analysts noted that a 115-million-Australian-dollar sale of telecommunications assets helped inflate the latest earnings figures.
The revelation that work-in-hand was worth 40 billion Australian dollars, down from 43 billion dollars at the start of the year, also affected the share price, analysts said.
Chief executive Hamish Tyrwhitt was nevertheless upbeat about the figures, saying the fall in work-in-hand reflected a “selective approach to tendering for new work” to raise the profit margin.
He said Leighton was on track to deliver on its promise of a net profit after tax of 520-600 million Australian dollars for the full year.
Tyrwhitt noted that Hochtief, now controlled by Spain’s ACS, had increased its stake in the company from 54 per cent to 55 per cent.
“Hochtief’s additional investment demonstrates its confidence in the group’s business model, management and outlook for the business,” he said.
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