Leighton Nears A$5 Billion New Projects; Order Book May Expand

By Angela Macdonald-Smith 

Feb. 15 (Bloomberg) -- Leighton Holdings Ltd., Australia’s largest engineering and construction company, is near to securing new projects worth as much as A$5 billion ($3.3 billion) as it bids to maintain or expand its order book during the global recession. 

“We see big momentum in our business,” Chief Executive Officer Wal King said today in an interview on Australian Broadcasting Corp.’s Inside Business program. Talks on the new contracts are “very advanced,” he added. 

Leighton, whose order book stood at A$37.5 billion at the end of December, aims to find projects in the construction and mining sectors even as the recession saps demand for iron ore and other raw materials. Last week, the Sydney-based company won A$2.6 billion of coal-mining deals in Indonesia and Mongolia. 

“One mine closure in central Queensland or cutbacks doesn’t signal the end of the mining industry,” King said. “The mining industry in Australia is still very much alive and well, but there is some adjustment going on in terms of high- cost producers and that’s inevitable.” 

Leighton has also so far won enough contracts in the Middle East to offset cancellations suffered by its operations in the region, King said. 

“Some of the adjustment in Dubai will involve pain, some pain for us, but right here today the cancellations that we’ve had are less than the new work that we’ve had ordered,” he said. 

The company’s first-half profit plunged 56 percent after writedowns on investments. 

To contact the reporter on this story: Angela Macdonald-Smith in Sydney at amacdonaldsm@bloomberg.net