Downer EDI (NZX: DOW) lands NZ$490M road contract in Victoria

Follow us on Google News:
 Downer EDI (NZX: DOW) lands NZ$490M road contract in Victoria
Image source: © Alan_smithee | Megapixl.com

Highlights

  • Downer gets a NZ$490 million contract.
  • The contract is for road maintenance in Victoria.
  • It is a government contract that begins in February 2023.

Downer EDI Limited (NZX:DOW), a provider of integrated services, announced today (28 October 2022) that it has received a road maintenance contract worth NZ$490 million. The contract is for a maximum term of seven-and-a-half years and begins in February 2023.

The company said that the contract was awarded by the Department of Transport and will be subject to annual budget reviews.

As per the contract, Dow is expected to deliver ‘routine maintenance, planned maintenance defect and hazard rectification’ for more than 8,500 kilometers of road in Victoria’s Hume region.

Grant Fenn, CEO, DOW, said that this would extend its partnership with the Department of Transport, maintaining 9,500 lane kilometers of state roads in Victoria.

As per the update, Downer is a leader in road services in Australia and New Zealand. It maintains more than 28,000 kilometers of roads across Australia and 25,000 kilometers across New Zealand.

Other contracts

Recently, DOW was also awarded a South Australian Housing Authority maintenance contract worth NZ$630 million. The work on it is scheduled to commence in January 2023.

The company reported that it would deliver 'reactive’ maintenance, vacant restoration, and minor works to 27,000 social and public housing units under the contract.

According to Grant Fenn,  this award shows Dow’s capability as a social housing maintenance service provider.

On 26 June 2022, Dow had been awarded two contracts worth NZ$800 million by Auckland for over a maximum term of 10 years. The contract started on 1 July 2022 for an initial five years with an option to be extended for another five years.

Downer’s FY22 performance

Downer reported a statutory net profit after tax of NZ$152 million and an underlying net profit after tax of NZ$225.3 million. Downer declared a final dividend of 12 cps, taking total dividends to 24 cps for the year. The company's total revenue was NZ$11,987 million with a statutory EBIDTA of NZ$358 million.

Further, the company revealed that it had exited non-core businesses like mining and hospitality and would now be focusing on its core urban services business. According to Downer, these businesses also have more predictable revenues and cash flows.

Stock update

On 28 October 2022, the stock was trading flat at NZ$0.00 at the time of writing this article.

Disclaimer

The content on this website, including, but not limited to, any articles, news, quotes, information, data, text, reports, ratings, opinions, images, photos, graphics, graphs, charts, animations and video (“Content”) is a service provided by Kalkine Media New Zealand Limited (Kalkine Media, we or us) and is available for personal and non-commercial use only. The principal purpose of the Content is to educate and inform. The Content does not contain or imply any recommendation or opinion intended to influence your financial decisions and must not be relied upon by you as such. Some of the Content on this website may be sponsored/non-sponsored, as applicable, but is NOT a solicitation or recommendation to buy, sell or hold the stocks of the company(s) or engage in any investment activity under discussion. Kalkine Media is neither licensed nor qualified to provide financial advice through this platform. Users should make their own enquiries about any investments and Kalkine Media strongly suggests users seek financial advice from a financial advice provider, stockbroker or other professional (including taxation and legal advice), as necessary. Kalkine Media hereby disclaims any and all liability to any user for any direct, indirect, implied, punitive, special, incidental or other consequential damages arising from any use of the Content on this website, which is provided without any express or implied warranties of any kind. The views expressed in the Content by the guests, if any, are their own and do not necessarily represent the views or opinions of Kalkine Media. Some of the images/music that may be used on this website are copyright to their respective owner(s). Kalkine Media does not claim ownership of any of the pictures displayed/music used on this website unless stated otherwise. The images/music that may be used on this website are taken from various sources on the internet, including paid subscriptions or are believed to be in public domain. We have used reasonable efforts to accredit a source wherever it is indicated or is found to be necessary or desirable.

Featured Articles

We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you are happy with it. OK