5 February 2018
NON-CASH IMPAIRMENT OF MINING GOODWILL
NO CHANGE TO UNDERLYING GUIDANCE FOR 2018 FINANCIAL YEAR
Downer EDI Limited (Downer) announced today that it will impair the carrying
value of the goodwill for its Mining business.
Mining''s historic high levels of returns have reduced significantly due to
non-renewal of two material contracts and delays in securing alternative
contracts. Downer remains positive in relation to Mining''s prospects, however
the estimated future cash flows for the Mining business do not support the
carrying value of the previously acquired goodwill.
A pre-tax charge of $77 million will be recorded in Downer''s results for the
six months to 31 December 2017.
This charge is a non-cash item and will not have any impact on cash flow or
the company''s existing operations.
The impairment will be disclosed as an individually significant non-recurring
item and therefore there is no change to Downer''s underlying guidance for the
2018 financial year.
Downer is targeting underlying net profit after tax and before amortisation
of acquired intangible assets (NPATA) of $295 million before minority
interests. This includes NPATA of $202 million for Downer and NPATA of $93
million for Spotless.
Further details will be provided when Downer announces its half year results
on 21 February 2018.
About Downer
Downer is the leading provider of integrated services in Australia and New
Zealand and customers are at the heart of everything it does. It exists to
create and sustain the modern environment and its promise is to work closely
with its customers to help them succeed, using world-leading insights and
solutions to design, build and sustain assets, infrastructure and facilities.
Downer employs approximately 56,000 people across more than 300 sites,
primarily in Australia and New Zealand, but also in the Asia-Pacific region,
South America and Southern Africa. It also owns 88 per cent of Spotless Group
Holdings Limited. For more information visit downergroup.com.
For further information please contact:
Michael Sharp, Group Head of Corporate Affairs and Investor Relations
+61 439 470 145
End CA:00313779 For:WKS Type:MKTUPDTE Time:2018-02-05 11:37:57