News: Warratah contract hits Downer FY result

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Downer EDI Limited (ASX:DOW) has booked a full year net loss of $27.8 million, falling from a profit of $3 million the year before. 

The engineering company’s result was hit by a provision on its Warratah trains contract and impairments on New Zealand resources business and UK works business.

In fiscal 2011 Downer made a $250 million provision on its multibillion-dollar Waratah contract to provide the New South Wales government with 78 train sets.

After lengthy delays two train sets have now been delivered. Downer says it plans to delay delivering the third set until more testing is conducted.

Looking ahead Downer expects to return to profitability and is targeting a net profit of $180 million, driven by increased earnings.

No final dividend was declared.