Syntheo hands back Northern Territory construction activities to NBN Co

Syntheo hands back Northern Territory construction activities to NBN Co

Expects to incur a $3 million one time charge associated with the exit

Syntheo, the joint venture between Service Stream and Lend Lease, will hand back the remainder of its design and construction activities in the Northern Territory to the NBN Co.

Syntheo will continue to work with NBN Co to complete its work in Western Australia and South Australia.

This comes on the back of a previous report in the AFRNBN Co will be downgrading its rollout targets.

As a result, Service Stream expects EBITDA for the Group for FY13 is expected to be about $20 million, including a one-time charge of about $3 million associated with Syntheo’s exit from the Northern Territory and business restructuring.

It is also expecting to incur a non-cash impairment charge of $70 - $90 million in the second half of FY13.

The amount of the impairment charge will be finalised following the updating of business plans and the FY14 budget.

Service Stream managing director, Graeme Sumner, stated its approach to construction activities will be reviewed following these impacts on the business.

Syntheo was appointed as a construction partner in 2011 for the Northern Territory and South Australia. At the time, the value of the contract was about $141 million and had the potential to be bumped up to $341 million, if it was extended for two more years.

Other companies involved in the NBN construction work include Silcar, Transfield and Visionstream.

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Tags nbn conorthern territoryService StreamLend LeaseSyntheo


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