First Impression: Downer EDI (DOW) 1H17

Bell Potter

Divisional EBIT: Transport Services up 31% to $41.4m (strong performance and the successful integration of the RPQ acquisition.), Technology and Communication up 53.9% to $21.7m (strong Aus and NZ), Utility Services down 8.8% to $20.8m(lower than expected profit from the Ararat wind farm project), Engineering Construction and Maintenance up 31.6% to $27.1m (strong performance on the Gorgon and Wheatstone projects and improved results from the resources related consultancies, Mining EBIT down 34.4% to $44.4m (predominantly due to the completion of the contract at Christmas Creek), Rail up $9.5m to $14.0m (improved profitability relating to Waratah TLS, benefits from cost saving initiatives following a restructure in the pcp, and improved performance by joint venture operations.) The prior period included $5.7 million of restructuring costs | Net Operating cash flow up 36.7% to $243.6m due to strong contract performance, advance payments received and higher distributions from equity accounted investees | Today’s share price reaction: Up 15% to $7.19 (10.53 am).


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