The agony for GPT’s big and small security holders continued yesterday as the stock hit more lows.
GPT stapled securities closed at $1.73, the lowest close in just over 24 years. That was a fall of 14c on the day or 7.5%. The shares are down 70c from the close last Friday, before Monday’s trading update.
The securities have fallen from $4.04 at the end of 2007, a loss of more than $4.31 billion in market capitalisation.
The company cut its full year operating income outlook by 27% on Monday after it was forced to postpone the sale of assets because of the global credit crisis.
GPT now says operating income for the year to December 31 will be $464 million, down from a previously forecast $633 million.
The company also lowered its distribution guidance by 31% to 20c per security, from the 28.9c forecast in February.
GPT was forced to issue another statement yesterday detailing that the finance costs tied to the changes in its credit ratings by ratings agencies have been accounted for in the assumptions underlying the guidance it gave on Monday.
GPT has said credit ratings agency Standard & Poor’s had lowered the company’s credit rating to BBB with a negative outlook, after GPT reduced its earnings guidance for the 2008 financial year on Monday.
The company said Moody’s credit rating for the company – at BAA1 with a negative outlook – had not changed, but the agency had advised GPT that it was "on review for a possible downgrade".
"Finance costs associated with the changes referred to above have been factored into assumptions underlying the guidance provided on 7 July 2008," GPT said in a statement on Wednesday.
The company was forced to postpone the sale of assets because of the credit crisis, and the company cut its full year operating income estimate because sales of GPT’s office developments, including half of a 40% stake in a wholesale office fund, have had to be put off because of falling demand since global credit rates surged last year as a result of the US sub-prime crisis.
Meanwhile engineering service provider Downer EDI says it has won more than $800 million of contracts over recent months to build and maintain telecommunications and power infrastructure and provide services to the mining industry.
The company said yesterday it had secured a $150 million five year contract with TelstraClear in New Zealand to provide services including maintaining the telecommunications network.
The company told the ASX that it will provide mechanical and electrical services to companies including Caltex, BP and Cement Australia for a combined total of $122 million.
In the electricity sector, Downer won $125 million of transmission projects and several wind farm construction projects worth $65 million.
Downer said it will also manufacture and supply explosives over five years to Australian Bulk Minerals in Tasmania for $45 million.
The company also secured $220 million of road and urban infrastructure maintenance contracts in Australia, New Zealand and Vanuatu.
Downer shares added 15c to $6.20 yesterday after the statement was made to the ASX. The shares are up more than 14% this year, compared to the 20% fall in the ASX 200.
