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Downer EDI downgrades profits again on weak mining business

Kevin Frayer/Getty Images

Downer EDI cut its full year profit forecast as a weak mining business and intense competition cut further into the engineering group.

The company announced a 23.9% lower profit to $72.1 million for the six months to December 2015.

The result reflects the write off of $13 million in bid costs and softness in resources businesses.

The total revenue of $3.5 billion was down $42.6 million, or 1.2%.

Downer is now targeting net profit of around $180 million for the full year, down from an estimate of $190 million forecast in August and the original full year guidance of $210 million. Last year’s full profit was $210.2 million.

CEO Grant Fenn says competition is intense and the mining and energy markets continue to be challenging.

“Commodity prices remain very low with a significant flow on effect on business investment and operating expenditure,” Fenn says. “Our customers are understandably very focused on costs and we continue to work closely with them.”

The company declared a fully franked interim dividend of 12 cents a share.

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