The new Karanga-a-Hape Station under construction last year. Photo / Michael Craig
The new Karanga-a-Hape Station under construction last year. Photo / Michael Craig
New Zealand’s biggest listed infrastructure business pushed up revenue 26 per cent to $2.3 billion in its latest year but rising costs hit the bottom line to halve profit.
Yesterday, Australian-owned Downer New Zealand filed its accounts with the Companies Office for the year to June 30, 2023.
Those showed the leap from last year’s $1.8b revenue.
But expenses also rose 27 per cent so the previous $37m net profit after tax dropped to $18.6m this year.
Craig West, country lead, said today: “External market conditions remain challenging for the infrastructure contracting sector, though Downer is observing positive signs of stabilisation. The resilience of supply chains is a key challenge and this has led to rising costs of raw materials. Alongside this our industry is experiencing increasing costs of both labour and recruitment, particularly due to the need for international recruitment.”
The group also revealed that it has been named as a co-defendant in a leaky building claim.
“That ... relates to water damage arising from historical design and construction methodologies and certification for residential and other buildings in New Zealand during the early to mid-2000s,” the latest accounts said.
Disclosing any information about that would be prejudicial to the group’s interests.
West said the leaky building issue “pertains to a Downer project from the mid-2000s, well prior to the Hawkins acquisition. This has been disclosed appropriately each year in our statutory accounts”.
The business has many huge contracts.
Downer NZ is part of the Link Alliance working on New Zealand’s biggest transport contract - the City Rail Link - with Vinci Construction Grands Projets S.A.S., Soletanche Bachy International NZ, WSP NZ, Aecom NZ and Tonkin + Taylor.
Murray Robertson, chief executive of Downer NZ. Photo / Michael Craig
Other work includes the downtown programme for Auckland Council and Auckland Transport, maintaining 25,000km-plus of roads here, finishing the new $300m Tōtara Haumaru North Shore Hospital building, working at Auckland Airport and head contractor for a new office building on the Pakenham/Halsey St corner in the Wynyard Quarter, a project due to be finished next year where Beca will move more than 1000 staff from Pitt St to 124 Halsey St.
Waikato University’s The Pā at Hillcrest Rd in Hamilton and Rototuna junior and senior high schools in Hamilton are other jobs the business that owns Hawkins is working on. Hawkins is also working on the second stage of Wellington’s Wakefield Hospital redevelopment, and the Christchurch Performing Arts Precinct.
Hawkins and China Construction built the Wynyard Quarter’s new $300m Park Hyatt Auckland. In 2018, about 140 Chinese tradespeople were flown in because of a local labour shortage. That hotel was designed by Ali Reda from AR+D in Singapore, with local firm Bossley Architects.
Park Hyatt - one of the huge contracts the company worked on. Photo / Hyatt
Accounts showed Downer NZ got Government grants of $16m last year which included Covid support but only $1.2m this year which included apprentice boost scheme money.
The group generates revenue from maintaining and managing transport infrastructure, utility infrastructure maintenance services in gas, power and water, maintaining and installing infrastructure in the telecommunications sector and facilities management.
In April, data business BCI ranked Downer-owned Hawkinsas second only to Mansons TCLM in the list of New Zealand’s 50 biggest builders according to the value of work in hand. It was a close thing: Hawkins had $857.50 million worth of current projects and Mansons had $857.502m worth.
Hawkins is owned by Downer EDI, listed on the Australian Stock Exchange, and Downer NZ has been running the Hawkins business here since it bought it for $60.5m six years ago.
From July 1 this year, Downer NZ’s chief executive Murray Robertson became chief operating officer for transport and infrastructure business across Australia and New Zealand.
At the same time, Downer stopped splitting the business into Downer Australia and Downer NZ, calling them by separate names. Now, both are just Downer, a transtasman contracting business known by the one name.
Craig Treloar, executive general manager of Hawkins, remained in his position heading Hawkins from its headquarters at 60 Stanley St, Parnell.
Robertson said Downer and Hawkins have distinctive niches: Downer, which bought Hawkins in 2017, does the horizontal work such as rail, roads, streets, and cycleways, while Hawkins does the vertical work like high-rise commercial buildings, airport projects, museums, hotels and so on.
Downer has about 25,000 employees in Australia and some 10,000 in New Zealand.
Anne Gibson has been the Herald’s property editor for 23 years, has won many awards, written books and covered property extensively here and overseas.
