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Leighton posts profit, confirms HLG to go public.

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Australian construction giant Leighton Holdings Group has announced a return to profit in its half year results, with net profit after tax of $121.8m (AUD$115m), compared with a loss of $626m in the first half of 2011.

The announcement included a commitment by CEO Hamish Tyrwhitt for the public listing of Habtoor Leighton Group (HLG) by 2016. Leighton has a 45% share in HLG.

"In the Middle East, we are looking to have HLG 'IPO ready by 2016', as a diversified standalone construction company within a four-year timeframe," said Tyrwhitt.

A team from Leighton is working with HLG on the recovery of payments for completed projects in the Middle East, with Tyrwhitt saying that the team "has made specific and measurable progress in the six months ended 30 June 2012".

During the six-month period, the value of Leighton's investment in HLG decreased from $379.4 million to $347.2 million, as a result of equity accounting Leighton's share of HLG's losses for the period of $32.2 million.

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The half-year report includes details of the attempts to recover fund from legacy projects.

"The economic downturn in the MEA region continues to delay payment from clients, particularly for projects in progress at the time the Leighton invested in HLG. It is assumed of the remaining unprovided legacy project receivables, 46% will be collected within 24 months and 54% collected subsequently."

Leighton's profits came off the back of a strong domestic construction market in Australia.

The company had total revenue of $11 billion, achieved from a portfolio of 450 active projects globally. It reconfirmed guidance for underlying profit of $400-$450 million for the year ending 31 December 2012.

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Article Details
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Publication:Construction Week
Article Type:Financial report
Date:Aug 7, 2012
Words:318
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