DOW 0.79% $5.12 downer edi limited


  1. 635 Posts.
    Preferred Tenderer for new $50M Rail Loco/Wagon Project


    HOMEX - Sydney




    Downer EDI Limited (Downer EDI) today announced that its Rail
    division, EDI Rail, had been selected preferred tenderer to provide
    and maintain locomotives and wagons for a major Australian
    infrastructure project.

    Details of the supply agreement will be announced when contractual
    arrangements have been completed early August. The work is valued at
    approximately $50 million.

    Commenting on this latest success, Managing Director of Downer EDI,
    Stephen Gillies, said the outlook for EDI Rail in providing services
    to the rail sector was positive and was in keeping with a run of
    recent successes.

    In joint venture with Bombardier Transportation, EDI Rail was
    recently awarded the $437 million contract for the supply and
    maintenance of new railcars for the South West Metropolitan Railway
    in Perth.

    EDI Rail is also in joint venture with Bombardier Transportation
    (Bombardier) for the supply and maintenance of locomotives (DMU's) as
    part of Bombardier's major supply agreement with National Express for
    the Victorian Government's regional fast train project. The value to
    EDI Rail is in excess of $100 million.

    In New South Wales, EDI Rail is progressively delivering to State
    Rail the new Millennium train for the suburban Sydney network, one of
    the most modern, advanced and highly developed commuter passenger
    trains in the world. Two four-car sets have been delivered and a
    third will be delivered shortly.

    Mr Gillies said EDI Rail's contract with State Rail entails three
    stages of build, being Stage 1 which involves the current production
    run of 81 cars (20x4-car sets, plus spare), and options held by State
    Rail on Stages 2 and 3 for a further 120 cars in total.

    "The NSW Premier's recent statement (30 June, 2002) indicated that
    the State Government was committed to expenditure of $50 million over
    the next year to start building the next 60 carriages of the
    Millennium train - bringing the total to 141 carriages. This
    represents Stages 1 and 2 of the contract, and Downer EDI is in
    current discussions with State Rail to agree the pre-conditions to
    exercise Stage 2," Mr Gillies said.

    "Currently, EDI Rail's forward order book is approximately $1
    billion," he said,

    Commenting on Downer EDI's current overall outlook, Mr Gillies said
    despite the difficult period for the financial markets globally over
    the last twelve months. Downer EDI was on track to produce results
    for 2002 financial year in keeping with its expectations at the time
    of the company's half yearly report to shareholders.

    "The broker research community has a range of $53 - 58 million for
    profit after tax and we would expect to be inside that range," Mr
    Gillies said.

    "While I will comment on the 2003 outlook at the 2002 Annual General
    Meeting to be held in October, we expect another strong year with
    work in hand 20% ahead of the same period last year and a number of
    significant opportunities to increase the order book."

    The company's 2002 financial results are expected to be released 26
    August and the Annual General Meeting will be held on 24 October,

    Contact: John Shuey, Group Corporate Affairs Manager (02) 9251 9899
    or 0413 705 491

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