Commentary on the Resultsfor the year ended 30 June 2010The...

Commentary on the Results
for the year ended 30 June 2010
The Group profit after tax and minority interest for the year was up by 39% to a record profit of $612 million. Total revenue
including joint ventures and associates, increased by 2% to $18.6 billion. The revenue generating markets for the Group were
infrastructure $10.4 billion; resources $6.4 billion; and property $1.8 billion. The Groups work in hand reached a new record level
of $41.5 billion. New work won, including variations and extensions to existing contracts, totalled $23.5 billion. The Groups cash
position improved significantly with the cash and cash equivalents balance of $1.3 billion being more than double that of last year.
The results of Group operating companies Thiess, Leighton Contractors, John Holland and Leighton Asia were higher compared to
the prior year. Leighton International, excluding the reduced contribution from the operations in the Middle East, also had an
improved result compared to the prior year. Leighton Properties however, continued to be affected by the weak property market
and recorded a loss for the year.
Major infrastructure projects and contract mining in Australia and Indonesia, together with a solid level of new work, formed the
basis of a record full year segment result for Thiess of $425 million. Thiess also has a record $16.3 billion work in hand and was
awarded $8.7 billion in new contracts, variations and extensions. These included the Desalination Plant in Victoria, the Gorgon
site preparation in Western Australia and Melbournes M80 Ring Road.
Leighton Contractors delivered a segment result of $271 million due to strong performances in construction, particularly transport
infrastructure; contract mining; and telecommunications. Leighton Contractors work in hand was $9.8 billion and new work won
for the year of $5.5 billion included an extension of the contract mining projects at BHP Billitons Pilbara operations; and marine
structures and a 2.1 km jetty for Chevrons Gorgon LNG development.
John Holland reported a segment result of $180 million with good performances across its multi‐disciplined contracting,
engineering and services businesses. Over the last year, rail services and maintenance developed into a major part of John
Hollands Australia‐wide rail business. The Metro Trains Melbourne Consortium, which includes John Holland, was selected to
operate and maintain Melbournes metropolitan passenger train franchise for a period of eight years. New work won was $3.9
billion and work in hand was $5.3 billion at 30 June 2010.
Strong performances from the Hong Kong, Indonesian and Mongolian operations were the major drivers of the record segment
result of $88 million for Leighton Asia, up by more than five times on prior year. Leighton Asia also has record work in hand, rising
by 89% to $6 billion and the year ahead offers many opportunities in Hong Kong, Macau and Mongolia to further develop this
division.
Leighton Internationals segment result of $24 million was lower than the prior year due to no contribution from its operations in
the Middle East. The results of the other operations of Leighton International were higher than the prior year.
The Group continues to maintain a strong balance sheet which provides the depth and flexibility necessary to tender large,
complex projects, providing working capital, investing in plant and equipment, and pursuing new opportunities. Managing the
Groups capital requirements remains a core discipline underpinning future growth and strategic direction. The Group has a
strong capital base with shareholders equity of $2.6 billion, gross cash of $1.3 billion and available cash and guarantee facilities of
around $1.4 billion.
The debt profile of the Group has continued to be restructured to a longer term maturity, reducing our reliance on short term
financial markets. Gearing, including off‐balance sheet leases, reduced from 48% at 30 June 2009 to 38% at 30 June 2010. The
value of the Groups owned property, plant and equipment now stands at $2.0 billion. The Group has operating and finance lease
facilities available to provide additional capacity and flexibility for the financing and risk management of its plant fleet. The value
of major plant and equipment under operating leases is $1.2 billion and under finance leases is $0.3 billion.
Earnings were 204.6 cents per share, compared to 149.5 cents in 2009. The directors announced a fully franked final dividend of
85 cents per share (55 cents per share fully franked last year) taking the full year dividend to 150 cents per share (115 cents per
share last year). The full year dividend represents a payout ratio of 73% of the Groups reported net profit after tax.