Downer switches focus due to mining downturn

Image: southburnett.com.au

ASX-listed Engineering company Downer EDI saw a 14 per cent drop in net profit, beating expectations, and said its strategy will involve targeting more rail and bus contracts.

The Australian, reporting on Downer’s results, released yesterday, notes that net profits after tax were down 14.1 per cent to $180.6 million, with a total revenue of $7.4 billion.

Resources earnings were hard-hit during the year by the mining downturn.

CEO Grant Fenn told The Australian Financial Review that state governments were increasingly looking to “outsource and franchise public transport service delivery, you see it in light rail, you see it in buses … and ultimately you’re going to see franchising of more heavy [passenger] rail networks.”

Downer said in a statement that while resources work was under pressure, “the company is progressing well in repositioning to service increased investment and outsourcing in roads and rail, public transport, utilities, defence and communications.”