Provider provider’s reversal of fortune

Service provider’s reversal of fortune

Multi-pronged service service provider Downer EDI has described a reversal of fortune in its yearly results, submitting a $150 million net decline as it continues to modify its mix of choices.

The outcome compares with a $261.8 million internet earnings final financial calendar year and was driven by contract losses in its engineering, building and maintenance products and services company as very well as 367.2 million (pre-tax) really worth of important, or a single-off, products.

The group’s services division endured a 38.8 for every cent plunge in earnings in advance of curiosity, tax and amortisation because of to COVID-19 ravaging the hospitality sector.

Downer’s utilities organization also dragged, with EBITA down 15.8 per cent as NBN contracts wound down and contracts in New Zealand have been concluded.

But the team still sees a lot of its long term in utilities, plus the multibillion-greenback market for transport services that proceeds to mature on equally sides of the Tasman.

It is no lengthier tendering for “hard dollar” development contracts in the coal, iron ore, industrial electrical and instrumentation, and structural, mechanical and piping sectors, declaring it is concentrating construction do the job on “areas in which it has a competitive differentiation”.

Downer declared a calendar year back it was considering marketing its mining services small business but suspended attempts in March because of to the extraordinary market volatility cased by the pandemic. Past month, it all over again declared it was checking out a partial or entire divestment following intrigued parties acquired in touch.

The group seeks to mop up the remaining 12 for each cent of cleaning corporation Spotless that it doesn’t by now personal, and although most of the customers serviced by the subsidiary’s hospitality business have been compelled to shut, prompting Downer to scale it down, the team suggests there is a potent pipeline of operate on the brief-to-medium-phrase horizon.

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Downer did not give earnings direction for 2020-21, citing the uncertain working surroundings, and did not pay a remaining dividend but expects to resume dividends this economic calendar year, subject matter to company overall performance.

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Sarah Gracie

About the Author: Sarah Gracie

Sarahis a reporter covering Amazon. She previously covered tech and transportation, and she broke stories on Uber's finances, self-driving car program, and cultural crisis. Before that, she covered cybersecurity in finance. Sarah's work has appeared in The Wall Street Journal, Bloomberg, Politico, and the Houston Chronicle.

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