The new head of construction giant Leighton has vowed to cut costs and recover outstanding payments as its parent company takes greater control of the company.
Germany-based and Spanish-owned construction company Hochtief recently increased its stake in Leighton to almost 70 per cent, as it sought to overhaul the company’s board.
Recently appointed Leighton chief executive Marcelino Fernandez Verdes, who is also the head of Hochtief, has told the company’s annual general meeting Leighton’s new management team was conducting a complete review.
“We aim to reduce costs, recover outstanding monies and strengthen the balance sheet,” he said.
A particular focus of the review is to improve efficiency in the business, Mr Fernandez Verdes said.
“What we want to do is simplify and streamline the business, ensuring that we have the most appropriate and efficient structure in place to deliver our services to our clients.”
Those measures are likely to involve job cuts, although no clear plans for restructuring have been announced.
Leighton has also long been weighed down by unpaid fees from clients.
Mr Fernandez Verdes said Leighton still expects to make an underlying profit of between $540 million and $620 million in its 2014/15 fiscal year.
Leighton made an underlying profit of $584 million in 2013/14.
Chairman Robert Humphris defended the Leighton’s reputation, which has been tarnished in the past year by allegations of corruption in its international business, and two class actions.
He said the corruption allegations were of deep concern, even though they had been “sensationalised” in media reports.
The allegations were reported to the Australian Federal Police by Leighton two and a half years ago, and those investigations are continuing.
One class action, relating to Leighton’s significant downgrade of its financial guidance in 2011, was settled by the company on Friday.
Leighton is seeking legal rulings to end the other class action, which relates to its disclosure of the corruption allegations.
Mr Humphris said Leighton had about 53,000 employees, and therefore would have issues in its business “from time to time”.
“We can’t always make our people do the right thing,” he said.
“Some will transgress.
“But we can set standards, then communicate and enforce them.”