Detention Centres operator’s 6 month profit Au$25M

Broadspectrum operates detention centres, under contract to the Australian government, in Papua New Guinea and Nauru.

The company that used to be called Transfield Services, has revealed a profit of Au$25.1 million for the six months to the end of December.

The jump in group earnings was mostly driven by a 6.5 per cent rise in underlying earnings before interest, taxation, depreciation and amortisation (EBITDA) in the company’s defence, social and property sector, which includes the detention centres contracts.

The Department of Immigration and Border Protection recently said the company was no longer the sole preferred bidder for a new, five-year contract.

Instead, the government extended Broadspectrum’s current contract by 12 months to give it time to open up the tender process.

Spanish infrastructure giant Ferrovial is making a takeover bid for Broadspectrum.

The uncertainty about the contract triggered a sharp sell off in Broadspectrum’s shares and left Ferrovial’s $692 million bid for the company in the balance.

Ferrovial described the change to the contract status as a “significant and negative” one that adversely impacts the value of the takeover target.

Broadspectrum remains open to talks with Ferrovial if the Spanish infrastructure returns with a higher takeover offer, said chief executive Graeme Hunt.

Source

News category: Asia Pacific.

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