Downer shares up after guidance reiterated

Downer EDI shares have soared more than seven per cent after the engineering firm said it was on track to achieve its full-year profit expectations.

Chief executive Grant Fenn told the company's annual general meeting on Wednesday that the first three months of Downer EDI's 2012/13 financial year had gone to plan prompting it to re-reiterate its profit guidance.

"Consequently, at this point, despite future market uncertainties, we maintain our guidance for the full-year result of earnings before interest and tax of $370 million and net profit after tax of $210 million."

The company made a net profit of $113 million for the year to June 30.

Downer shares gained 25 cents, or 7.31 per cent, to $3.67 shortly after the speech.

When it posted its full-year results, the company said there was increasing uncertainty around the level and timing of government and private sector investment and infrastructure in Australia and New Zealand.

"We do anticipate that competition for available work will increase, presenting challenges but also opportunities," he said at the general meeting.

"Against this background, Downer's work-in-hand remains at solid levels and our industry leading businesses are well-placed to capitalise on the pipeline of opportunities in the markets in which we operate."

Chairman Mike Harding told the meeting that the company would continue to focus on improving its risk management processes.

"Risk and project management are the lifeblood of a company like Downer and getting them right will be a key foundation for our future success," he said.

But, Mr Harding said, he could not tell shareholders when the company would resume paying dividends.

"The board's position is that we would like Downer to pay dividends as soon as it is appropriate, having regard to the company's performance, its balance sheet strength and its capacity to distribute franking credits," he said.

"The board will monitor these criteria closely during the year."

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