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Writedowns lead to H1 loss for Transfield

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SYDNEY, Feb 26 AAP

February 26 2013, 10:26AM

Construction and maintenance firm Transfield Services has posted a first half loss of $247 million, after announcing massive writedowns driven by a weakening mining sector.

The company's net loss for the six months to December 31 includes the per-tax impairment of intangible and some tangible assets worth $284.3 million.

Transfield on Tuesday said the writedowns related mostly to its Easternwell Mineral's Exploration and Marine Geotechnical businesses, whose earnings were affected by a dramatic weakening in the minerals exploration market over the period.

After-tax net profit, excluding these impairments and amortisation, was $26.9 million, down 38 per cent on the previous corresponding period.

Transfield said earnings before interest, tax, depreciation and amortisation (EBITDA) in its core Australia and New Zealand business was up 12 per cent to $61.5 million, despite challenging macro-economic conditions.

First half EBITDA in the company's Americas business was flat compared to the same period last year, while its Middle East and Asia arm posted an earnings loss of $800,000.

Chief executive Graeme Hunt said Transfield had reviewed its portfolio and was now working on creating a clearer direction for the company.

"Our strategic focus is providing high value asset management services to clients in sustainable-growth resources, energy, infrastructure sectors, including government outsourcing," Mr Hunt said in a statement.

"We are confident the refined strategy will deliver improved long-term returns for shareholders."

On the back of a decline in earnings from parts of its business, Transfield has revised down its full year net profit guidance to be between $85 million and $90 million, pre-amortisation and impairments.

Transfield will pay shareholders an unfranked interim dividend of three cents per share.