Leighton slashes profit guidance by $200m

Leighton Holdings (ASX:LEI) has announced big cuts to its full-year profit guidance after reporting losses on its Brisbane Airport Link (APL) and Victorian desalination plant (VDP) projects today.

In February Leighton forecast an underlying profit after tax of $600-650 million. Now it expects to make between $400-450 million for the year ending December 31, 2012.

The airport link project is now forecast to cut $148 million, and the desalination plant $106 million, from the construction giant’s bottom line after tax.

Leighton Holdings chief executive officer Hamish Tyrwhitt said the company saw no need to raise capital to cover the losses due to its strong balance sheet.

“Notwithstanding the disappointing performance of these projects, the Leighton Group has a solid balance sheet, maintains a near record level of work in hand of around $44.5 billion with a healthy level of inherent profitability, and a range of opportunities across our core markets,” Tyrwhitt says in the statement to the ASX.

“We are targeting completion of APL by around the middle of the year and VDP by the end of the year, which allows us to move forward and take advantage of the many opportunities that are still emerging.”