Downer EDI has flagged a goodwill impairment charge of $77 million on its mining operations after failing to renew two material contracts and delays in securing alternative business.

The company on Monday said its mining business’ historic high levels of returns had reduced significantly due to the loss of the contracts but it remains positive for the segment’s prospects.

Downer says the expected first-half one-off pre-tax charge will have no impact on cash flow or existing operations, nor will it change the company’s underlying guidance for the 2018 financial year.

The heavy engineering company is targeting net profit after tax and before amortisation of $295 million – including $202 million for Downer and $93 million for Spotless, of which it owns 87.8 per cent following a lengthy takeover struggle.

By Simone Ziaziaris