Engineering and infrastructure company Downer EDI Ltd
(ASX:DOW) says it expects full year profit to be in line with previous guidance despite saying it will book a $70 million pre-tax impairment charge and the need for further funding for its NSW train carriages project.
The company says as part a review of the asset carrying values, a $70 million pre-tax impairment charge will be incurred in the second half of the 2010 financial year.
Downer says around $60 million of the impairment charges are non cash and will have no impact on the underlying business or group cash flow.
The company also says following a full review of the $1.9 billion Waratah Rolling Stock Manufacture project, it has identified the need to raise a provision of $190 million.
Key elements that account for the projected cost overruns include; design development and approval, material supply, time-related project overhead costs and project delay costs.
Downer says its balance sheet and liquidity are strong with in excess of $500 million in cash and undrawn facilities.
Downer posted a profit of $189.38 million in fiscal 2009.
