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Transfield warns of $285m in writedowns

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AAP

2013-02-19

Shares in Transfield Services have dived by more than six per cent after it warned it would have to make up to $285 million in asset writedowns.

The construction and maintenance firm on Tuesday said it expected impairment of intangible and tangible assets totalling $270-$285 million.

The news shocked investors, who pushed Transfield's shares 14.5 cents lower to $1.955 at 1028 AEDT.

The charges relate to the group's Easternwell Minerals Exploration and Marine Geotechnical businesses, as well as Transfield's downstream maintenance unit in the United States.

"The writedowns are non-cash, do not affect Transfield Services' gearing covenant under its banking agreements and have no impact on operations," the company said in a statement.

"The company will not need to raise equity as a consequence of these writedowns."

Transfield launched a full business review in late 2012 and sharpened its focus on costs and productivity.

Shareholders were warned last November that the outlook for the remainder of fiscal 2013 was for softer market conditions.

This included a slowdown in the resources sector, falling discretionary expenditure in minerals exploration and development, and delayed timing of some infrastructure opportunities.

At the time, chief executive Graeme Hunt refused to provide any forecasts for the group's full year earnings due to market volatility.

It had previously forecast an operating profit at the lower end of a range between $125 million and $135 million.

Transfield is due to report its first half earnings results on February 26.