News: NZ quake to chip $10M off Downer FY earning

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Downer EDI Ltd (ASX:DOW) has advised that the Christchurch earthquake in New Zealand is expected to chip up to $10 million of its full year earnings before interest and tax. 



The engineering company says, since the release of its first half results at the end of last month, it has become apparent that the flow-on effects of the earthquake will impact earnings more than had previously been anticipated.



The earthquake occurred only six days before the release of Downer’s interim results on 28 February.



In the six months to 31 December 2010 Downer slipped into the red, pulled down by provisions relating to its troubled Waratah train project in New South Wales.



Downer’s latest profit guidance warns that the severity of the earthquake will place significant pressure on maintenance and infrastructure expenditure across New Zealand.



The company expects to participate in the rebuilding and reconstruction of Christchurch, but says the timing of that work is unknown at this point.



For the first half of the 2011 financial year Downer booked a net loss of $103.8 million, from a profit of $87 million a year earlier.