Leighton looks beyond Dubai

LEIGHTON'S Middle Eastern subsidiary has topped up its rapidly diminishing workbook with a $500 million ports project in Abu Dhabi.

But analysts say the engineering giant will still struggle to keep earnings from the region at anywhere near boom levels, even though signs of weakness in Dubai could be offset by its oil-rich neighbours.

Al Habtoor Leighton's contract for 1.4 billion United Arab Emirates dirham ($487 million) with the Abu Dhabi Ports Company is for construction of onshore port facilities, buildings and infrastructure such as roads, bridges and landscaping.

Work has already begun and completion is scheduled for September 2011.

The contract follows a string of project collapses for the group. Last month it cancelled a $1.9 billion project with Abu Dhabi's Tourism Development and Investment Company; in April it stopped work on the $1.8 billion extension of Dubai's international airport following a disagreement with the government; last year the group cancelled the $US1.3 billion Trump Tower in Dubai.

Work in hand has fallen from about $US8 billion at the start of the year to about $US6.5 billion ($8.3 billion) today, a company spokesman said.

While Dubai was "flat and will continue to remain flat", he said the group saw opportunity in oil-rich states such as Abu Dhabi.

The managing director, David Savage, said Abu Dhabi "continues to offer strong new work prospects, particularly in large-scale infrastructure, and it is likely to be our most important market for the foreseeable future".

Leighton bought a 45 per cent stake in the United Arab Emirates engineering company Al Habtoor in 2007, for $870 million. The joint venture is now the largest constructor in the region.

Since January Leighton has cut its profit forecast twice, and analysts say it is already priced for a disappointing end-of-year report.