Why is Downer EDI (ASX:DOW) in news today?

Image Source: © Sergio_ksv | Megapixl.com

Highlights:

  • Downer shares closed strong on Wednesday.
  • The company said that its Dijlang Alliance has secured a Rail Projects Victoria contract.
  • The Alliance contract is likely to generate a revenue of AU$270 million for Downer.

Shares of Downer EDI Limited (ASX:DOW) defy the broader market to close 1.17% higher on the ASX today (29 June 2022) after the company shared that its Djilang Alliance had secured a Victorian Rail Contract.   

Djilang Alliance is a JV (joint venture) between McConnell Dowell, Downer, WSP and Arup.

The shares closed at AU$5.180 per share on Wednesday. The shares have dipped by over 10.23% in a month. On a year-to-date basis, the shares sank by 15.22%. In five years, the shares dropped by 17.65%.

Meanwhile, the benchmark index, ASX200 Industrial index (XNJ) fell by 0.58% to close at 6,316.10 points. ASX200 index closed 0.94% down at 6,700.20 points.

Details of the Victorian Rail Contract

According to the ASX-announcement, Rail Projects Victoria has awarded the contract to the alliance. Under the agreement, South Geelong to Waurn Ponds Duplication project would be delivered by the JV as a part of the Regional Rail Revival program.

Chiefly, the alliance would duplicate around eight kilometres of track, undertake signalling upgrades, and replace level crossings at the Surf Coast Highway and Fyans Street with elevated rail bridges. The agreement includes new station buildings at South Geelong and Marshall with second platforms, landscape forecourts and pedestrian overpasses.

Downer said that it would generate revenue of approximately AU$270 million under this project. The company also said that the major construction would begin later this year. Late-2024 is the targeted completion date.

Image source: © G-image | Megapixl.com

About Downer

Downer EDI is dual listed on NZX and ASX, with head office in New South Wales, Australia. The company is operating across New Zealand and Australia. The company's core business is to design, construct and sustain infrastructure, assets and facilities.

During the first half of 2022 (1HFY22), ending 31 December 2022, Downer reported a 2.3% decrease in the total revenue to AU$6.0 billion. Statutory EBITDA dropped by 4.9% to AU$186.2 million. Downer said that the fall was driven by the disinvestments and the Covid-19 driven pandemic.

During the half, the company announced an unfranked interim dividend of 12 cents per share. It was paid on 24 March 2022. One year back (in 1HFY21), the company distributed a dividend of 9 cents per share.


 


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