Engineering and construction company United Group Ltd
(ASX:UGL) says it expects to maintains its full year earnings guidance despite an unsuccessful outcome relating to a dispute with RailCorp over the manufacture and delivery of railcars.
The company announced today that it has received an interim arbitration decision on a claim involving outer suburban railcars that service the Sydney passenger rail network and the Hunter Railcars that service the Hunter Region.
United says it has not been successful in its entire claim and will record a loss on the outer suburban and Hunter Railcar contracts.
The company says the outcome however will result in a positive cash input in fiscal 2010.
United says taking into account the combination of recent contract wins, strong trading conditions and a number of steps to mitigate this outcome, the company expects to maintain its previously stated earnings guidance for fiscal 2010 with earnings significantly weighted in the second half of the year.
United Group recorded net profit of $142.4 million in 2009.
