Australian engineering firm, Downer EDI (DOW) once again confirmed its status quo as a perennial underperformer, delivering a profit downgrade for 2008, which drove its shares down by as much as 11% on Friday.
The news brought the stock down as much as 78 cents to a low of $5.86 in early afternoon trade. The stock then slid further to close at $5.79.
More than 5.5 million shares had changed hands.
Speaking at the company's annual general meeting on Friday, Chairman Barry O'Callaghan conceded:
"It is extremely disappointing to have to report once again the strong performance of the group's core business has been overshadowed by some of the same problem contracts that led to previous financial year's loss (FY07)."
Mr Callaghan was referring to the expected earnings growth for financial year 2008.
At the meeting today, CEO Brent Waldron outlined no growth is expected inFY08, forecasting FY07's $280 million earnings before interest and tax as a guideline, saying the updated outlook is ‘impacted by mining operations'.
An interim CEO, Brent Waldron has been appointed in August, whilst the company is in the process of searching for and appointing a permanent CEO, a process in which Waldron is a candidate.
‘Brent has rapidly implemented a series of senior management and operation changes and with the board implemented a full business review which is well advanced," said O'Callaghan.
"The business review announced just over two months ago is now well underway," he added.
The group reported net profit after tax of $101 million for FY07, compared to a one-off loss of $25 million for 2006.
